What Is a 501c3 Determination Letter?: A Guide for Nonprofits
The Internal Revenue Service provides a 501(c)(3) determination letter to nonprofit organizations that apply for tax-exempt status under that section of the federal tax codes. The determination letter lists the IRS ruling and the basis for its decision. Tax-exempt organizations and members of the public may request or locate copies of the determination letter through several methods.
A nonprofit organization applies to the IRS for tax-exempt status under section 501(c)(3) of the tax codes by submitting IRS Form 1023. The 501(c)(3) tax code allows tax-exempt status for public charities, as well as private foundations with a charitable purpose and activities that meet IRS requirements. After consideration of the nonprofit’s application, including review of its articles of incorporation or other organizing document filed with state government, the IRS mails the organization a 501(c)(3) letter of determination.
Tip
Nonprofit status is granted at the state level, while tax-exempt status is a federal designation.
The letter of determination states that after review of the application, tax-exempt status is granted for exemption under the 501(c)(3) tax code. Letter content varies based on the ruling.
- The dated letter states whether the nonprofit is a public charity or private foundation.
- The IRS includes a statement, if applicable, that the organization’s tax-exempt status is granted through an advance ruling, such as with a new nonprofit that does not have the documentation necessary for a full determination.
- The letter includes the nonprofit’s employer identification number and its DUNS number, both of which are required by the IRS.
- Additional content includes the nonprofit’s contact information and tax responsibilities, such as requirements to file a Form 990 tax return.
- A determination letter for a group exemption is directed to the organization that applied, with member organizations listed in the body of the letter.
A nonprofit uses the determination letter as proof of tax-exempt status when applying for grants, entering into partnership agreements with other organizations and seeking exemption from sales taxes and official reports. Additionally, the IRS requires nonprofit organizations to comply with public disclosure rules and make certain official documents, including the determination letter, available when requested by an individual or group.
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The “Compliance Guide for 501(c)(3) Public Charities” contains information about public disclosure of documents.
Complete and submit Form 4506-A to the IRS to request a copy of an original 501(c)(3) determination letter. Instead of the form, you also may submit a written letter that includes the nonprofit’s name and EIN, as well as your contact information. Fax or mail the request to the IRS. The fax number and address are provided in the Instructions for Form 4506. If the nonprofit tax-exempt status is through a group exemption, contact the organization that applied for and received the determination letter.
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A nonprofit organization may request from the IRS an Affirmation Letter, instead of a copy of the original determination letter, to confirm its tax-exempt status or a change of its address.
An individual or group may request a copy of a 501(c)(3)determination letter from the nonprofit organization or from the IRS. Contact the nonprofit and ask if it has a copy that you can pick up, have mailed to you or download from its website. The IRS also must maintain copies of tax-exempt organization documents covered in public disclosure rules. You can view the document at a local or national IRS office with advance notice, or you may mail or fax a request to the IRS using Form 4506-A.