IRS begins accepting applications for group exemption rulings again

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After pausing new group applications in 2020, the IRS last week issued Rev. Proc. 2026‑8 setting out the procedures for a central organization to obtain and maintain a group exemption letter (GEL) that recognizes a tax exemption for its subordinate organizations collectively, rather than requiring each subordinate to file its own application. The policy aims to reduce burden, improve data integrity and oversight and increase transparency in the group ruling program. This revenue procedure reopens the pipeline beginning Jan. 20, 2026, and provides transition relief for preexisting group rulings.

Rev. Proc. 2026‑8 replaces Rev. Proc. 80‑27 (as modified by Rev. Proc. 96‑40) and defines several terms central organization to administration:

• A central organization is a Section 501(c) entity (or a political subdivision/instrumentality thereof) that has one or more subordinates under its general supervision or control.
• A subordinate organization is a chapter/local/unit of the central organization body with its own governing instrument (incorporated or not).
• Preexisting GELs and preexisting subordinates are those in place as of the publication date.
• Supplemental Group Ruling Information (SGRI) is the information a central organization must submit annually to keep the GEL current.

The procedure also clarifies “annual information return or notice” (Forms 990‑series, including 990‑PF for private foundations) and automatic revocation under Section 6033(j).

Before filing a group application, the central organization must already be recognized as exempt, have an exemption application pending, or, if its exemption was previously auto‑revoked, have filed for reinstatement. The IRS will not issue a GEL to a central organization lacking a valid or pending exemption posture.

To secure a GEL, the central organization must have at least five subordinates. To maintain the GEL thereafter, at least one subordinate must remain (subject to transition timing for preexisting GELs). A central organization may maintain only one GEL after the transition period, eliminating the historic practice of multiple overlapping group rulings.

A subordinate must be affiliated with the central organization and subject to general supervision or control. Affiliation is facts‑and‑circumstances based (e.g., inclusion on a central organization directory, listing on a Section 1.6033‑2(d) group return, shared religious bonds for church structures). General supervision requires the central organization to annually obtain, review and retain information on the subordinate’s finances, activities and filing compliance, and to annually educate the subordinate on maintaining exempt status and filing obligations.

A copy of Form 990/990‑EZ may satisfy the “obtain/review/retain” requirement; a 990‑N copy is not sufficient. If a subordinate is not required to file an annual return/notice (e.g., certain churches and schools), the central organization may satisfy the supervision requirement but is not required to do so for that subordinate.

Alternatively, a subordinate can be considered under control if, for example, the central organization appoints a majority of the subordinate’s directors/officers, the governing bodies overlap or a written agreement (including a management agreement) provides the central organization with approval/removal rights or direct operational control.

Any organization described in Section 501(c) can be a subordinate if it is affiliated and supervised/controlled and meets the matching and uniformity rules included in the procedure. To meet the matching requirement, all subordinates in a GEL must be described in the same paragraph of Section 501(c) (e.g., all Section 501(c)(3) public charities, or all Section 501(c)(4) social welfare organizations). The central organization itself need not be described in the same paragraph as its subordinates.

Subordinates that share the same purpose must include a uniform purpose statement in their governing instruments. If the GEL covers multiple subordinate “tracks” (e.g., schools and hospitals), each track must have its own uniform purpose language.

Entities ineligible to be initially included or later added as subordinates include foreign organizations; Section 501(c)(3) private foundations; Section 509(a)(3) Type III supporting organizations; Section 501(c)(29) CO‑OP health insurers; and organizations for which exempt status has been automatically revoked and not reinstated. Subordinates must each have an EIN. 

Applying for and maintaining a group exemption

Group applications are filed electronically on Form 8940 via pay.gov. The central organization must provide required information about itself (name, address, EIN, proof it is a qualifying central organization) and detailed information about each subordinate (name, address, EIN, formation date; representations as to affiliation, supervision/control, eligibility, matching paragraph, and non‑foreign status; public charity classification where applicable; and the text of uniform purpose statements).

If the central organization will file a group return under Section 1.6033‑2(d), subordinates on that group return must share the central’s accounting period. For private schools, charitable hospitals and Section 501(c)(4) subordinates, the central organization must include additional documentation (e.g., Rev. Proc. 75‑50 nondiscrimination for schools; Section 501(r) for hospitals; and Section 506/Form 8976 compliance for (c)(4)s). The central organization must also update the IRS if information changes while the application is pending.

To maintain a GEL, the central organization (other than certain churches) must annually submit SGRI 30–90 days before the end of its accounting period. SGRI must include:

• A description of changes in purposes, character, or operations across subordinates
• Separate lists of (i) name/address changes; (ii) subordinates no longer included; (iii) subordinates automatically revoked; and (iv) subordinates added
• For subordinates being added, statements confirming formation date, applicability of the original representations, written authorization to include the subordinate, accounting period alignment (if on a group return), and any special‑category documentation (schools/hospitals/(c)(4))

The SGRI submission will be electronic unless the IRS specifies otherwise. Filing SGRI does not replace other IRS information requests; both the central organization and subordinates must still provide information under Sections 6001 and 6033 as requested. Church central organizations may, but are not required, to submit SGRI.

The IRS may terminate a GEL if the central organization goes out of existence, loses its exemption (including automatic revocation), fails to timely and completely file SGRI (except certain churches), has no subordinates, fails to exercise supervision/control. Termination may also occur if more than half of subordinates are auto‑revoked or fail the matching/uniformity requirements, or if the central organization otherwise fails to satisfy the procedure. The central organization also may voluntarily terminate.

A subordinate may be removed by the IRS if it no longer qualifies under Section 501(c), is in an ineligible category (e.g., foreign, private foundation, Type III supporting organization, Section 501(c)(29)), has been auto‑revoked, or is described in a different paragraph of Section 501(c) than represented). The IRS may also remove a subordinate for other failures to meet the procedure.

The central organization may remove a subordinate with or without cause but must give the subordinate 30 days’ notice before filing SGRI to effect removal and must notify the subordinate afterward with information on how it can seek recognition independently. The GEL remains effective for all other subordinates.

If a group application is not accepted, a GEL is not issued or is later terminated, or a subordinate is removed, the IRS will not recognize the affected subordinate’s exemption going forward unless it takes further action (e.g., filing its own application, being included in a new group application or being added to another GEL). Churches and associations of churches retain their Section 501(c)(3) status regardless of GEL disposition due to Section 508(c). If a subordinate is automatically revoked, it must obtain reinstatement (Rev. Proc. 2014‑11) before being eligible for a GEL again.

For subordinates organized within 27 months of the group application submission date, the effective date is typically the date of formation. If organized more than 27 months before submission, the effective date is generally the submission date, unless the organization already had a recognized exemption or was in another GEL immediately prior; in this case, the prior effective date carries over.

Analogous rules govern additions via SGRI and situations following non‑acceptance, termination or removal. For entities that were auto‑revoked, the effective date post‑reinstatement is determined under Rev. Proc. 2014‑11, and then the group rules apply if such an entity is later included in a GEL.