The IRS intends for responses to the questionnaire [PDF 682 KB] to help it better understand the relationship between central or parent organizations of group rulings and their subordinates and how they satisfy their exemption and filing requirements.
The IRS also provided a cover letter [PDF 48 KB] addressing how entities are to respond to the questionnaire.
Under IRS procedures, certain affiliated organizations may obtain recognition of their exempt status on a group basis—rather than filing separate applications—provided that the parent or central organization exercises general supervision and control over its affiliated organizations. Furthermore, certain members of this group may be entitled to file the required annual information return on a group basis.
In June 2011, the Advisory Committee on Tax Exempt and Government Entities issued a report that raised concerns with the group exemption process and recommended certain changes to address these concerns. See TaxNewsFlash-Exempt Organizations 2011-62.
Recently, IRS Exempt Organizations division announced its intention to analyze the issue by issuing a questionnaire to a cross-section of group ruling holders and by expanding educational efforts for group ruling members.
The group rulings questionnaire is part of a new voluntary compliance check and does not constitute an IRS exam. Only selected central organizations that received a letter from the IRS asking them to complete the questionnaire online may complete and submit the questionnaire, which is due 60 days from the date of the questionnaire letter. However, although the IRS encourages completion of the questionnaire, it is optional.
The questionnaire consists of 80 questions over nine parts:
- Information about the central organization
- Information about the subordinates
- Communication with subordinates
- Relationship with subordinates
- Services provided to subordinates
- Inclusion of subordinates in group exemption ruling
- Form 990-T filing information
- Annual information returns, notices, and group returns
- Annual group exemption update
For more information, contact:
Rick Speizman, National Partner-In-Charge, KPMG’s Exempt Organizations Tax Practice (ExoTax)
+1 (202) 533-3084