IRS Group Ruling Changes

IRS Group Ruling Changes

Ross Williams


Dear Treasurers, Finance Chairs and Pastors,

In May 2020, the IRS released proposed updates to the rules for group tax exemptions. These proposed updates would make several changes that could negatively impact our churches group exemption, including: 

  • A requirement that all subordinate organizations adopt a “uniform governing instrument;”
  • Specific definitions for the “general supervision” or “control” that the central organization must exercise over subordinates; and
  • A requirement that subordinates fall under the same subsection of Section 509(a) of the Tax Code (this would limit the types of ministries that could be included in the group exemption).

Fortunately, most of these changes would not apply to organizations already included in our group exemption.  Any changes included in the final version of the rules would only impact new applicants.
Because of these uncertainties, I strongly encourage churches that have not already done so to apply for inclusion in the group exemption as soon as possible. This will allow the denomination to process your application under the current group exemption rules (which remain in effect until the IRS releases the final version of the new rules). 

To apply, click here.  The website’s automated process should generate a letter in your church's name in 10 minutes or less.