What Is a DLN Tax-Exempt Number?

Businesses, government agencies and other organizations assign DLNs to important documents as a unique identification number. Although DLNs can be used in any organization, they are especially common in financial organizations such as banks and taxing agencies. The Internal Revenue Service relies on DLNs to keep track of tax returns and many of its records, including tax-exemption decisions.

A document locator number is a multi-digit number assigned to a specific document in order to allow the document to be easily tracked back to its original source file. Each organization creates its own protocol for DLNs, but the numbers are usually precisely formatted. For example, the first two digits may indicate the document's source, the next two digits the type of document and other digits may indicate date of creation, category codes and other critical features for the document.

The IRS uses DLNs to track its determination letters and other documents pertaining to tax exemption actions. A typical tax document contains several detailed identifiers, such as an employer identification number for a business or Social Security number for an individual, along with name and address information and the IRS case manager. It also contains a 14-digit document locator number.

The DLNs used by the IRS for tax returns and for tax exemption documents contain 14 digits divided into seven fields. Each field has a particular meaning that is useful within the IRS administrative system. For example, the first field is two digits and represents the IRS processing center handling the exemption request. Other fields include codes for the tax classification, a date code and a block and serial number to identify the details of how the document was handled and transmitted.

Nonprofit organizations sometimes publish IRS determination letters detailing the group's tax-exempt status. The letter contains DLNs. The IRS makes public its procedural manuals for using DLNs for document management. For example, the manual on "Exempt Organizations Automated Processing Procedures" instructs users to query the system by DLN, employer identification number or several other identifiers.