Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic. 170(b)(1)(A)(vi) Appears to meet 509(a)(2) 1. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Sections 509(a)(1) and 170(b)(1)(A)(vi). This classification is available only to organizations that receive a substantial part of their financial support in the form of contributions from publicly supported organizations, governmental units or the general public. Based on the financial information you submitted, you receive more than one-third of your support from contributions, membership fees and gross receipts from activities related to your exempt purposes, which indicates that you should be classified as a public charity under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/charities. If you agree to be classified under Section 509(a)(2), please sign and date below. If you do not agree to be classified under Section 509(a)(2), please submit a detailed description of how you meet the requirements for classification under Sections 509(a)(1) and 170(b)(1)(A)(vi). We’ll consider your submission before making a final determination about your classification. We agree to be classified as a public charity under Section 509(a)(2). ________________________________ ____________________________ Signature Date Requested 509(a)(2) appears to meet 170(b)(1)(A)(vi) 2. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Section 509(a)(2). This classification is available to organizations that receive more than one-third of their support from contributions, membership fees and gross receipts from activities related to exempt purposes. Based on the financial information you submitted, you receive a substantial part of your financial support in the form of contributions from publicly supported organizations, governmental units or the general public, which indicates that you should be classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi). You can find additional information about public charity classification on our website, www.irs.gov/charities. If you agree to be classified under Sections 509(a)(1) and 170(b)(1)(A)(vi), please sign and date below. If you do not agree to be classified under Sections 509(a)(1) and 170(b)(1)(A)(vi), please submit a detailed description of how you meet the requirements for classification under Section 509(a)(2). We’ll consider your submission before making a final determination about your classification. We agree to be classified as a public charity under Section 509(a)(1) and 170(b)(1)(A)(vi). ________________________________ ____________________________ Signature Date Requested 170(b)(1)(A)(i) (church) appears to meet 170(b)(1)(A)(vi) or 509(a)(2) 3. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification as a church under Sections 509(a)(1) and 170(b)(1)(A)(i). Based on the information you submitted, you may be more appropriately classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/charities. If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification. If you want to pursue classification as a church, please provide a detailed description of how you meet the requirements of a church under Sections 509(a)(1) and 170(b)(1)(A)(i). You must also complete and submit Schedule A to Form 1023, if you have not already done so. If you want to request classification as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2) specifically, you can submit a statement requesting classification under Sections 509(a)(1) and 170(b)(1)(A)(vi) or Section 509(a)(2), including a detailed description of how you meet the requirements for classification under the relevant section. We’ll consider your request before making a final determination about your classification. Requested 170(b)(1)(A)(ii) (school) appears to meet 170(b)(1)(A)(vi) or 509(a)(2) 4. It appears you should be classified as a public charity under a provision of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification as a school under Sections 509(a)(1) and 170(b)(1)(A)(ii). Based on the information you submitted, you may be more appropriately classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/charities. If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification. If you want to pursue classification as a school, please provide a detailed description of how you meet the requirements of a school under Sections 509(a)(1) and 170(b)(1)(A)(ii). You must also complete and submit Schedule B to Form 1023, if you have not already done so. If you want to request classification as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2) specifically, you can submit a statement requesting classification under Sections 509(a)(1) and 170(b)(1)(A)(vi) or Section 509(a)(2), including a detailed description of how you meet the requirements of the relevant section. We’ll consider your request before making a final determination about your public charity classification. Requested 170(b)(1)(A)(iii) (hospital) appears to meet 170(b)(1)(A)(vi) or 509(a)(2) 5. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification as a hospital under Sections 509(a)(1) and 170(b)(1)(A)(iii). Based on the information you submitted, you may be more appropriately classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/charities. If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification. If you wish to pursue classification as a hospital, please provide a detailed description of how you meet or will meet the requirements of a hospital under Sections 509(a)(1) and 170(b)(1)(A)(iii). You must also complete and submit Schedule C to Form 1023, if you have not already done so. If you want to request classification as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2) specifically, you can submit a statement requesting classification under Sections 509(a)(1) and 170(b)(1)(A)(vi) or Section 509(a)(2), including a detailed description of how you meet the requirements of the relevant section. We’ll consider your request before making a final determination about your public charity classification. Requested POF appears to meet 170(b)(1)(A)(vi) or 509(a)(2) 6. It appears you should be classified as a public charity under a section of the Internal Revenue Code that is different than the section selected on your application. You requested recognition of exemption under Internal Revenue Code Section 501(c)(3) with classification as a private operating foundation. Under Section 4942(j)(3), a private operating foundation must make qualifying distributions directly in furtherance of its exempt purposes. In practice, this generally means that private operating foundations engage directly in the active conduct of activities accomplishing their exempt purposes rather than passively distributing funds to individuals or organizations that accomplish those purposes. Based on the information you submitted, you may be more appropriately classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2). You can find additional information about public charity classification on our website, www.irs.gov/charities. If you want the IRS to determine your classification based on the information you submitted, please provide a written statement requesting the IRS to determine your classification. If you wish to pursue classification as a private operation foundation, please provide a detailed description of how you meet or will meet the requirements. If you want to request classification as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi) or under Section 509(a)(2) specifically, you can submit a statement requesting classification under Sections 509(a)(1) and 170(b)(1)(A)(vi) or Section 509(a)(2), including a detailed description of how you meet the requirements of the relevant section. We will consider your request before making a final determination about your public charity classification. Requested public charity appears to be private foundation or private operating foundation 7. It appears you should be classified as a private [operating] foundation. You requested recognition of exemption under Internal Revenue Code Section 501(c)(3) with classification as a public charity under [Instruction: Insert Option A, B, or C from below.]. Based on the information you submitted, you may not meet the requirements of your requested public charity classification and may be more appropriately described as a private [operating] foundation [under Section 4942 (j)(3)]. You can find additional information about public charity classification on our website, www.irs.gov/charities. If you agree to be classified as a private [operating] foundation, please sign and date below. If you do not agree to be classified as a private [operating] foundation, please submit a detailed description of your anticipated sources of receipts, such as any fundraising, grants, membership fees or other activities, and how you meet the requirements for the public charity classification you requested in your application. We agree to be classified as a private [operating] foundation. ________________________________ ____________________________ Signature Date Option A: Sections 509(a)(1) and 170(b)(1)(A)(vi), which applies to organizations that receive a substantial part of their financial support in the form of contributions from publicly supported organizations, governmental units or the general public. Option B: Section 509(a)(2), which applies to organizations that receive more than one-third of their support from contributions, membership fees and gross receipts from activities related to their exempt functions. Option C: Section 509(a)(3), which applies to supporting organizations. Requested private operating foundation appears to be private non-operating foundation 8. It appears you should be classified as a private foundation. You requested recognition of exemption under IRC Section 501(c)(3) with classification as a private operating foundation. Under Section 4942(j)(3), a private operating foundation must make qualifying distributions directly in furtherance of its exempt purposes. In practice, this generally means that private operating foundations engage directly in the active conduct of activities accomplishing their exempt purposes rather than passively distributing funds to individuals or organizations that accomplish those purposes. Based on the information you submitted, you may be more appropriately described as a private (non-operating) foundation. You can find additional information about foundation classification on our website, www.irs.gov/charities. If you agree to be classified as a private foundation, please submit a written statement indicating your agreement. If you do not agree to be classified as a private foundation, please submit a more detailed description of how you will meet the requirements of Section 4942(j)(3), including a description of your day-to-day operations. 509(a)(3) - Requested 509(a)(3) appears to meet 170(b)(1)(A)(vi) 9. It appears you should be classified as a public charity under a section of the IRC that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Section 509(a)(3) as a supporting organization. Based on the financial information you submitted, you receive a substantial part of your financial support in the form of contributions from publicly supported organizations, governmental units or the general public, which indicates that you should be classified as a public charity under Sections 509(a)(1) and 170(b)(1)(A)(vi). You can find additional information about public charity classification on our website, www.irs.gov/charities. If you agree to be classified under Sections 509(a)(1) and 170(b)(1)(A)(vi), please sign and date below. If you do not agree to be classified under Sections 509(a)(1) and 170(b)(1)(A)(vi), please submit a detailed description of how you meet the requirements for classification under Section 509(a)(3). We’ll consider your submission before making a final determination about your classification. We agree to be classified as a public charity under Section 509(a)(2). ________________________________ ____________________________ Signature Date Requested 509(a)(3) appears to meet 509(a)(2) 10. It appears you should be classified as a public charity under a section of the IRC that is different than the section selected on your application. You requested recognition of exemption under Section 501(c)(3) with public charity classification under Section 509(a)(3) as a supporting organization. Based on the financial information you submitted, you receive more than one-third of your support from contributions, membership fees and gross receipts from activities related to your exempt purposes, which indicates that you should be classified as a public charity under Section 509(a)(2). If you agree to be classified as a public charity under Section 509(a)(2), please sign and date below. If you still think that you are best classified under Section 509(a)(3), please provide additional information to support that classification. You can find additional information about public charity classification on our website, www.irs.gov/charities. We agree to be classified as a public charity under Section 509(a)(2). ________________________________ ____________________________ Signature Date 509(a)(3) Organizational requirements 11. You requested recognition under IRC Section 501(c)(3) as a supporting organization described under Section 509(a)(3) and you indicated that [Insert name of supported organization] is your supported organization. However, your organizing document does not meet the organizational test required by Treasury Regulation Section 1.509(a)-4(c)(1). Therefore, please amend your organizing document, [insert title of organizing document], to: a. Limit the organization's purposes to one or more purposes set forth in Section 509(a)(3)(A); b. Not expressly empower the organization to engage in activities that are not in furtherance of the authorized purposes; c. Specify the supported organization(s) by name or by naming a similar purpose or charitable class of beneficiaries; and d. Not expressly empower the organization to support or benefit any organization other than the specified publicly supported organizations. Submit a complete copy of your amended organizing document that shows proof of [filing/adoption/execution]. [A corporation must file an amendment with the appropriate state agency.][An unincorporated association's amendment must have two signatures and show the date it was adopted.][A trustee must sign and date a trust amendment.] 12. Since your organizing document, [insert title of document], does not specify the supported organization(s) by name or similar purpose or charitable class, provide a statement describing your historic and continuing relationship between you and the supported organization(s). Your description should demonstrate that you have a substantial identity of interest with your supported organization(s) and it is well known to the general public. 13. You have requested a change in foundation classification to that of a supporting organization described under Section 509(a)(3). Accordingly, please complete the enclosed Schedule F of Form 8940. 509(a)(3) Operational test 14. Do (or will) you make any grants other than grants to or for the use of, or provide any services or facilities for, anyone other than: your supported organization(s), individual members of the charitable class benefited by one or more of your supported organizations, other supporting organizations that also support or benefit one or more of your supported organizations, or state colleges or universities described in Section 511(a)(2)(B)? If so, please explain. 15. Do (or will) you engage in fundraising activities or unrelated trade or business? If so, is it exclusively to raise funds for one or all of: your supported organization(s), individual members of the charitable class benefited by one or more of your supported organizations, other supporting organizations that also support or benefit one or more of your supported organizations, or state colleges or universities described in Section 511(a)(2)(B)? 16. [Because/If] you support one or more Section 501(c)(4), (5), or (6) organizations, explain how you maintain discretion and control over the funds to ensure they are used exclusively for charitable purposes. 509(a)(3) Type I 17. Do the officers, directors, trustees or membership of one or more of your supported organization(s) have the power to appoint or elect a majority of your officers, directors or trustees? 509(a)(3) Type II 18. Does a majority of your governing board consist of individuals who also serve on the governing board of the supported organization(s)? If yes, describe the process by which your governing board is appointed and elected. 509(a)(3) Type III - general rules 19. Do you accept gifts or contributions from any person (other than a public charity described in Section 509 (a)(1), (2), or (4) who directly or indirectly controls (alone, or together with family members or a 35% controlled organization) the governing body of your supported organization? 20. Do you support one or more organizations not organized in the United States? Note: A Type III supporting organization may not support an organization organized outside the United States. Notification requirement 21. Do (or will) you provide the following documents annually to each of your supported organizations: A written notice describing the type and amount of support provided by the supporting organization to the supported organization during the taxable year preceding the year in which the notice is provided; A copy of the supporting organization's Form 990 or 990-EZ that was most recently filed as of the date the notification is provided; and A copy of the supporting organization's governing documents, as most recently amended, to the extent not previously provided. This information must be postmarked or electronically transmitted by the last day of the fifth month following the close of the taxable year. Responsiveness test 22. Do the officers, directors, trustees or membership of the supported organization regularly elect or appoint one or more of your officers, directors or trustees? 23. Are one or more members of your governing body also officers, directors or trustees or hold other important offices in the supported organization? If so, please explain. 24. Do your officers, directors or trustees maintain a close and continuous working relationship with the officers, directors or trustees of the supported organization? If yes, explain and provide documentation. 25. Does the supported organization have a significant voice in your investment policies, the manner of making grants, the timing of grants, and the selection of recipients of grants, and in otherwise directing the use of your income or assets? If yes, explain and provide documentation. Integral part test as functionally-integrated 26. Are the grants, scholarships or other payments made to individual beneficiaries who are members of the charitable class benefited by the supported organization? If so, please explain how. 27. Are the individual beneficiaries selected on an objective and nondiscriminatory basis (as described in Reg. 53.4945-4(b))? 28. Do the officers, directors or trustees of the supported organization have a significant voice in the timing of the payments, the manner of making them, and the selection of recipients? 29. Is the making or awarding of the payments part of an active program that directly furthers the supported organization’s exempt purposes and in which you maintain significant involvement, as defined in Treas. Reg. Section 53.4942(b)-1(b)(2)(ii) (except that “supporting organization” is substituted for “foundation”)? Does not meet functionally integrated type III 30. According to your application, you’re requesting classification as a Functionally Integrated Type III supporting organization. You indicate that the activities you conduct, that would otherwise be carried out by your supported organization, include: [receiving and accepting gifts, grants and bequests; raising charitable donations; applying for private foundation grants; and administering these funds by investing them]. Based on the information you supplied, you do not appear to meet the integral part test required to be described as a Functionally Integrated Type III supporting organization (see Treasury Regulation Section 1.509(a)-4(i)(4)(i) and Treas. Reg. Section 1.509(a)-4(i)(4)(ii)(C)). If you want to pursue recognition as an organization described as a Functionally Integrated Type III supporting organization, please submit additional information showing how you satisfy the integral part test, specifically how substantially all your activities directly further the exempt purposes of your supported organization. If you want to pursue recognition as an organization described as a Non-Functionally Integrated Type III supporting organization, please submit additional information on how you meet the integral part test of that section. If you want to change your foundation classification request to anything other than Section 509(a)(3), please submit a written statement indicating your classification request. Integral part test as non-functionally-integrated 31. To determine if you meet the requirements of the integral part test as non-functionally-integrated for 509(a)(3) Type III, please provide: a. The amount you contribute annually to each supported organization. Attach a schedule. b. The total annual revenue of each supported organization. If you need additional space, attach a list. c. Do you or the supported organization(s) earmark your funds for support of a particular program or activity? If “Yes,” explain and list the total annual revenue of the supported department or program. Other issues 32. You indicated that you support an organization that is exempt under Section 501(c)([x]). Under certain circumstances a supporting organization may support exempt organizations other than those described under Section 501(c)(3). The supported organization must be described in Section 501(c)(4), (5), or (6) and meet the same public support requirements that Section 509(a)(2) provides for Section 501(c)(3) organizations. Treasury Regulation Section1.509 -4(k). Please submit a copy of Schedule A of the supported organization's most recently filed Form 990 to show that the supported organization passes the public support requirements. Additional information See the complete list of Applying for Exemption/Miscellaneous Determination Sample Questions by topic.
