Internal Revenue Bulletin 2020-21 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 2020–21
May 18, 2020
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
Rev. Proc. 2020-29, page 859.
This procedure modifies Rev. Proc. 2020-1 temporarily to
allow for the electronic submission of requests for letter
rulings, closing agreements, determination letters, and
information letters issued by the Associate Chief Counsel
(Corporate), Associate Chief Counsel (Financial Institutions
and Products), Associate Chief Counsel (Income Tax and
Accounting), Associate Chief Counsel (International), Asso-
ciate Chief Counsel (Passthroughs and Special Industries),
Associate Chief Counsel (Procedure and Administration),
and Associate Chief Counsel (Employee Benefits, Exempt
Organizations, and Employment Taxes). This procedure
also contains revised procedures for determination letters
issued by the IRS Large Business and International Division.
EXEMPT ORGANIZATIONS
Notice 2020-36, page 840.
This notice contains a proposed revenue procedure that
sets forth updated procedures under which recognition of
exemption from federal income tax for organizations de-
scribed in § 501(c) of the Internal Revenue Code may be
obtained on a group basis for subordinate organizations af-
filiated with and under the general supervision or control of
a central organization.
INCOME TAX
Notice 2020-32, page 837.
This notice provides guidance regarding the nonde-
ductibility of costs that are the subject of loan for-
giveness under section 1106 of the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act), Public
Law 116-136, 134 Stat. 281 (March 27, 2020).
Notice 2020-34, page 838.
This notice provides the applicable reference price for qual-
ified natural gas production from qualified marginal wells
during taxable years beginning in calendar year 2019 for
the purpose of determining the marginal well production
credit under §45I. The applicable reference price for taxable
years beginning in calendar year 2019 is $2.55 per 1,000
cubic feet. The notice also provides the credit amount used
for the purpose of determining the marginal well production
credit. The credit amount for taxable years beginning in cal-
endar year 2019 is $0.08 per 1,000 cubic feet.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
May 18, 2020 Bulletin No. 2020–21

Part III
Notice 2020-32
PURPOSE
This notice provides guidance regard-
ing the deductibility for Federal income
tax purposes of certain otherwise deduct-
ible expenses incurred in a taxpayer’s
trade or business when the taxpayer re-
ceives a loan (covered loan) pursuant to
the Paycheck Protection Program under
section 7(a)(36) of the Small Business
Act (15 U.S.C. 636(a)(36)). Specifically,
this notice clarifies that no deduction is
allowed under the Internal Revenue Code
(Code) for an expense that is otherwise
deductible if the payment of the expense
results in forgiveness of a covered loan
pursuant to section 1106(b) of the Corona-
virus Aid, Relief, and Economic Security
Act (CARES Act), Public Law 116-136,
134 Stat. 281, 286-93 (March 27, 2020)
and the income associated with the for-
giveness is excluded from gross income
for purposes of the Code pursuant to sec-
tion 1106(i) of the CARES Act.
BACKGROUND
I. Paycheck Protection Program
The Paycheck Protection Program was
established by section 1102 of the CARES
Act. Under the Paycheck Protection Pro-
gram, a recipient of a covered loan may
use the proceeds to pay (1) payroll costs,
(2) certain employee benefits relating to
healthcare, (3) interest on mortgage obli-
gations, (4) rent, (5) utilities, and (6) inter-
est on any other existing debt obligations.
See section 7(a)(36)(F) of the Small Busi-
ness Act (describing allowable uses of a
covered loan). See also Q&A 2.r. in Part
III of the interim final rule, Business Loan
Program Temporary Changes; Paycheck
Protection Program, Docket No. SBA-
2020-0015, 85 Fed. Reg. 20811, 20814
(April 15, 2020).
Under section 1106(b) of the Cares
Act, a recipient of a covered loan can
receive forgiveness of indebtedness on
the loan (covered loan forgiveness) in
an amount equal to the sum of payments
made for the following expenses during
the 8-week “covered period” beginning on
the covered loan’s origination date (each,
an eligible section 1106 expense): (1) pay-
roll costs, (2) any payment of interest on
any covered mortgage obligation, (3) any
payment on any covered rent obligation,
and (4) any covered utility payment. See
section 1106(a) (defining the terms “cov-
ered period”, “covered mortgage obliga-
tion,” “covered rent obligation,” “covered
utility payment,” and “payroll costs”), (b)
(regarding eligibility for covered loan for-
giveness), and (g) (regarding covered loan
forgiveness decisions). However, section
1106(d) of the CARES Act provides that
the amount of the covered loan forgive-
ness is reduced if, during the covered pe-
riod, (1) the average number of full-time
equivalent employees of the recipient is
reduced as compared to the number of
full-time employees in a specified base
period, or (2) the salary or wages of cer-
tain employees is reduced by more than 25
percent as compared to the last full quar-
ter before the covered period. In addition,
pursuant to an interim final rule issued by
the Small Business Administration, no
more than 25 percent of the amount for-
given can be attributable to non-payroll
costs. See Q&A 2.o. in Part III of the in-
terim final rule, Business Loan Program
Temporary Changes; Paycheck Protection
Program, Docket No. SBA-2020-0015, 85
Fed. Reg. 20811, 20813-20814 (April 15,
2020).
Section 1106(i) of the CARES Act ad-
dresses certain Federal income tax con-
sequences resulting from covered loan
forgiveness. Specifically, that subsection
provides that, for purposes of the Code,
any amount that (but for that subsection)
would be includible in gross income of
the recipient by reason of forgiveness
described in section 1106(b) “shall be ex-
cluded from gross income.” Thus, section
1106(i) of the CARES Act operates to ex-
clude from the gross income of a recipi-
ent any category of income that may arise
from covered loan forgiveness, regardless
of whether such income would be (1)
properly characterized as income from the
discharge of indebtedness under section
61(a)(11) of the Code, or (2) otherwise in-
cludible in gross income under section 61
of the Code.
II. Deductibility of Eligible Section 1106
Expenses
Neither section 1106(i) of the CARES
Act nor any other provision of the CARES
Act addresses whether deductions other-
wise allowable under the Code for pay-
ments of eligible section 1106 expenses
by a recipient of a covered loan are al-
lowed if the covered loan is subsequent-
ly forgiven under section 1106(b) of the
CARES Act as a result of the payment of
those expenses. This Notice addresses the
effect of covered loan forgiveness on the
deductibility of payments of eligible sec-
tion 1106 expenses.
III. Summary of Relevant Law
Section 161 of the Code provides that,
in computing taxable income under sec-
tion 63 of the Code, there shall be allowed
as deductions the items specified in part
VI, subchapter B, chapter 1 of the Code
(for example, sections 162 and 163). How-
ever, section 161 of the Code provides
that the allowance of these deductions is
subject to the exceptions provided in part
IX, subchapter B, chapter 1 of the Code.
These exceptions include section 265 of
the Code. See also section 261.
In general, section 162 of the Code
provides for a deduction for all ordinary
and necessary expenses paid or incurred
during the taxable year in carrying on any
trade or business. Covered rent obliga-
tions, covered utility payments, and pay-
roll costs consisting of wages and benefits
paid to employees comprise typical trade
or business expenses for which a deduc-
tion under section 162 of the Code gen-
erally is appropriate. Section 163(a) of
the Code provides a deduction for certain
interest paid or accrued during the taxable
year on indebtedness, including interest
paid or incurred on a mortgage obligation
of a trade or business.
However, section 265(a)(1) of the Code
and §1.265-1 of the Income Tax Regula-
tions provide that no deduction is allowed
to a taxpayer for any amount otherwise
allowable as a deduction to such taxpay-
er that is allocable to one or more classes
of income other than interest (whether or
not any amount of income of that class or
Bulletin No. 2020–21 837 May 18, 2020

classes is received or accrued) wholly ex-
empt from the taxes imposed by subtitle A
of the Code. See generally section 265(a)
(1); §1.265-1. The term “class of exempt
income” means any class of income
(whether or not any amount of income of
such class is received or accrued) that is
either wholly excluded from gross income
under any provision of subtitle A of the
Code or wholly exempt from the taxes im-
posed by subtitle A of the Code under the
provisions of any other law. See §1.265-
1(b)(1). The purpose of section 265 of the
Code is to prevent a double tax benefit.
Section 265(a)(1) of the Code ap-
plies to otherwise deductible expenses
incurred for the purpose of earning or
otherwise producing tax-exempt income.
It also applies where tax exempt income
is earmarked for a specific purpose and
deductions are incurred in carrying out
that purpose. In such event, it is proper
to conclude that some or all of the de-
ductions are allocable to the tax-exempt
income. See Christian v. United States,
201 F. Supp. 155 (E.D. La. 1962) (school
teacher was denied deductions for expens-
es incurred for a literary research trip to
England because the expenses were allo-
cable to a tax-exempt gift and fellowship
grant); Banks v. Commissioner, 17 T.C.
1386 (1952) (certain educational expenses
paid by the Veterans’ Administration that
were exempt from income tax, were not
deductible); Heffelfinger v. Commission-
er, 5 T.C. 985 (1945), (Canadian income
taxes on income exempt from U.S. tax are
not deductible in computing U.S. taxable
income); and Rev. Rul. 74-140, 1974-1
C.B. 50, (the portion of a state income
tax paid by a taxpayer that is allocable to
the cost-of-living allowance, a class of in-
come wholly exempt under section 912, is
nondeductible under section 265).
In Manocchio v. Commissioner, 78
T.C. 989 (1982), a taxpayer attended a
flight-training course that maintained and
improved skills required in the taxpay-
er’s trade or business. As a veteran, the
taxpayer was entitled to an educational
assistance allowance from the Veterans’
Administration pursuant to 38 U.S.C. sec-
tion 1677 (1976) equal to 90 percent of
the costs incurred. Because the payments
received were exempt from taxation un-
der 38 U.S.C. section 310(a) (1976), the
taxpayer did not report them as income.
The taxpayer did, however, deduct the
entire cost of the flight training course,
including the portion that had been reim-
bursed by the Veterans’ Administration. In
a reviewed opinion, the court held that the
reimbursed flight-training expenses were
nondeductible under section 265(a)(1) of
the Code.
NON-DEDUCTIBILITY OF
PAYMENTS TO THE EXTENT
INCOME RESULTING FROM LOAN
FORGIVENESS IS EXCLUDED
UNDER SECTION 1106(i) OF THE
CARES ACT
To the extent that section 1106(i) of
the CARES Act operates to exclude from
gross income the amount of a covered
loan forgiven under section 1106(b) of
the CARES Act, the application of section
1106(i) results in a “class of exempt in-
come” under §1.265-1(b)(1) of the Regu-
lations. Accordingly, section 265(a)(1) of
the Code disallows any otherwise allow-
able deduction under any provision of the
Code, including sections 162 and 163, for
the amount of any payment of an eligible
section 1106 expense to the extent of the
resulting covered loan forgiveness (up to
the aggregate amount forgiven) because
such payment is allocable to tax-exempt
income. Consistent with the purpose of
section 265, this treatment prevents a dou-
ble tax benefit.
This conclusion is consistent with pri-
or guidance of the IRS that addresses the
application of section 265(a) to otherwise
deductible payments. In particular, Rev.
Rul. 83-3, 1983-1 C.B. 72, provides that,
where tax exempt income is earmarked for
a specific purpose, and deductions are in-
curred in carrying out that purpose, section
265(a) applies because such deductions
are allocable to the tax-exempt income.
In accordance with the analysis set forth
in Rev. Rul. 83-3, the direct link between
(1) the amount of tax exempt covered loan
forgiveness that a recipient receives pursu-
ant to section 1106 of the CARES Act, and
(2) an equivalent amount of the otherwise
deductible payments made by a recipient
for eligible section 1106 expenses, con-
stitutes a sufficient connection for section
265(a) to apply to disallow deductions for
such payments under any provision of the
Code, including sections 162 and 163, to
the extent of the income excluded under
section 1106(i) of the CARES Act.
The deductibility of payments of eli-
gible section 1106 expenses that result in
loan forgiveness under section 1106(b)
of the CARES Act is also subject to dis-
allowance under case law and published
rulings that deny deductions for otherwise
deductible payments for which the tax-
payer receives reimbursement. See, e.g.,
Burnett v. Commissioner, 356 F.2d 755,
759-60 (5th Cir. 1966); Wolfers v. Com-
missioner, 69 T.C. 975 (1978); Charles
Baloian Co. v. Commissioner, 68 T.C. 620
(1977); Rev. Rul. 80-348, 1980-2 C.B. 31;
Rev. Rul. 80-173, 1980-2 C.B. 60.
CONTACT INFORMATION
The principal authors of this notice are
Sarah Daya and Patrick Clinton of the Of-
fice of Associate Chief Counsel (Income
Tax & Accounting). For further informa-
tion regarding the application of sections
161, 162, 163, and 261 please contact Ms.
Daya at (202) 317-4891 (not a toll-free
call); for further information regarding the
application of section 265, please contact
Mr. Clinton at (202) 317-7005 (not a toll-
free number).
Reference Price for Section
45I Credit for Production of
Natural Gas from Marginal
Wells During Taxable Years
Beginning in Calendar Year
2019
Notice 2020-34
SECTION 1. PURPOSE
This notice provides the applicable
reference price for qualified natural gas
production from qualified marginal wells
during taxable years beginning in cal-
endar year 2019 for the purpose of de-
termining the marginal well production
credit (MWC) under §45I of the Internal
Revenue Code. The applicable reference
price for taxable years beginning in cal-
endar year 2019 is $2.55 per 1,000 cubic
feet (Mcf).
May 18, 2020 838 Bulletin No. 2020–21

Bulletin No. 2020–21 839 May 18, 2020
This notice also provides the credit
amount used for the purpose of determin-
ing the MWC for taxable years beginning
in calendar year 2019. The credit amount
is determined using the 2019 inflation ad-
justment factor of 1.3015 and the applica-
ble reference price of $2.55 per Mcf. The
credit amount for taxable years beginning
in calendar year 2019 is $0.08 per Mcf.
SECTION 2. BACKGROUND
Section 45I(a), as it relates to quali-
fied natural gas production, provides that,
for purposes of § 38, the MWC for any
taxable year is an amount equal to the
product of (1) the credit amount and (2)
the qualified natural gas production that is
attributable to the taxpayer.
Section 45I(c)(1) provides that “qual-
ified natural gas production” means do-
mestic natural gas produced from a qual-
ified marginal well. Section 45I(c)(3)(A)
provides that a qualified marginal well is
a domestic well (i) the production from
which during the taxable year is treated as
marginal production under § 613A(c)(6),
or (ii) which, during the taxable year (I)
has average production of not more than
25 barrel-of-oil equivalents per day, and
(II) produces water at a rate not less than
95 percent of total well effluent.
Section 613A(c)(6)(D) and (E) provide
that “marginal production” means domes-
tic natural gas produced during any tax-
able year from a property which is a strip-
per well property for the calendar year in
which the taxable year begins. A “stripper
well property” is, with respect to any cal-
endar year, any property producing not
more than 15 barrel equivalents per day,
determined by dividing the average daily
production of domestic crude oil and do-
mestic natural gas from producing wells
on the property for such calendar year by
the number of such wells.
Section 45I(c)(2)(A) provides that
generally only the first 1,095 barrels or
barrel-of-oil equivalents (as defined in §
45K(d)(5)) produced during the taxable
year qualify for the MWC. This limitation
is proportionately reduced in the case of a
short taxable year or in the case of a well
that is not capable of production each day
of a taxable year. See § 45I(c)(2)(B). The
number of wells on which a taxpayer may
claim the MWC is not limited.
Section 45I(d)(2) provides that to
claim the credit a taxpayer must hold an
operating interest in the qualified margin-
al well producing the natural gas to which
the credit relates. Under § 45I(d)(1) if a
well is owned by more than one owner
and the natural gas production exceeds the
limitation under § 45I(c)(2), the qualify-
ing natural gas production attributable to
the taxpayer is determined on the basis of
the ratio which taxpayer’s revenue interest
in the production bears to the aggregate of
the revenue interests of all operating in-
terest owners in the production. Finally,
§ 45I(d)(3) provides that the MWC is not
allowable if the taxpayer is also eligible to
claim the § 45K nonconventional sources
credit for the taxable year, unless the tax-
payer elects not to claim the credit under §
45K for the well.
For purposes of § 45I(a)(1), the credit
amount is 50 cents (adjusted for inflation)
per Mcf of qualified natural gas produc-
tion (tentative credit amount). See § 45I(b)
(1)(B) and (b)(2)(B).
Section 45I(b)(2)(A) and (B) provide
that the tentative credit amount (adjusted
for inflation) is reduced (but not below
zero) to the extent that the applicable
reference price exceeds $1.67 (adjusted
for inflation). More specifically, § 45I(b)
(2)(A) provides that the tentative credit
amount (adjusted for inflation) is reduced
by an amount which bears the same ratio
to the tentative credit amount (adjusted
for inflation) as the excess (if any) of the
applicable reference price over $1.67 (ad-
justed for inflation), bears to $0.33 (ad-
justed for inflation). As a result, the MWC
is not available if the applicable reference
price for qualified natural gas production
is $2.00 (adjusted for inflation) or more.
Section 45I(b)(2)(A) also provides that
the applicable reference price for a taxable
year is the reference price for the calendar
year preceding the calendar year in which
the taxable year begins. Section 45I(b)(2)
(C)(ii) provides that the term “reference
price” means, with respect to any calendar
year, in the case of qualified natural gas
production, the Secretary’s estimate of the
annual average wellhead price per Mcf for
all domestic natural gas.
Section 45I(b)(2)(B) provides that in
the case of any taxable year beginning in a
calendar year after 2005, each of the dol-
lar amounts contained in § 45I(b)(2)(A)
will be increased to an amount equal to
such dollar amount multiplied by the in-
flation adjustment factor for such calendar
year (determined under § 43(b)(3)(B) by
substituting “2004” for “1990”).
SECTION 3. INFLATION
ADJUSTMENT FACTOR AND
REFERENCE PRICE
.1 Inflation Adjustment. The inflation
adjustment factor under § 45I(b)(2)(B) for
calendar year 2019 is 1.3015.
.2 Reference Price. The Secretary’s
estimate of the calendar year 2018 an-
nual average wellhead price per Mcf for
all domestic natural gas under § 45I(b)
(2)(C)(ii) was calculated by applying
the Producer Price Index commodity in-
dex for “Natural Gas from the Wellhead”
(WPU053101051)
1
published by the Bu-
reau of Labor Statistics (BLS) as part of its
Producer Price Index program, to the 2017
annual average wellhead price ($2.68)
published in Notice 2019-37, 2019-37
I.R.B. 629. The annual Producer Price
Index commodity index for natural gas
published by the BLS was 83.4 in 2017
and 79.3 in 2018, which implies a ratio of
2018 to 2017 average wellhead prices of
0.951 (79.3 / 83.4). Therefore, the Secre-
tary’s estimate of the calendar year 2018
annual average wellhead price per Mcf for
all domestic natural gas is $2.55 per Mcf
(0.951 x $2.68 per Mcf).
For years after 2018, the Secretary in-
tends to continue calculating the reference
price by application of the Producer Price
Index commodity index for “Natural Gas
from the Wellhead” (WPU053101051)
published by the BLS to the previous
year’s reference price.
SECTION 4. CALCULATION OF
CREDIT AMOUNT
Under § 45I(b)(1)(B) and (2)(B), the
tentative credit amount used to calculate
the MWC for taxable years beginning in
calendar year 2019 is 65 cents per Mcf
($0.50 x 1.3015 inflation adjustment fac-
1
https://data.bls.gov/cgi-bin/srgate. The BLS publishes indexes and not actual or average prices.

May 18, 2020 840 Bulletin No. 2020–21
tor). To determine the credit amount for
purposes of § 45I(a)(1), the tentative cred-
it amount must be reduced as provided by
§ 45I(b)(2)(A).
Pursuant to § 45I(b)(2)(A), the ten-
tative credit amount for taxable years
beginning in calendar year 2019 is re-
duced (but not below zero) by an amount
(§ 45I(b)(2) Reduction Amount) which
bears the same ratio to the tentative cred-
it amount as (i) the excess (if any) of the
applicable reference price over $2.17
($1.67 x 1.3015 inflation adjustment fac-
tor), bears to (ii) $0.43 ($0.33 x 1.3015
inflation adjustment factor). According-
ly, the § 45I(b)(2) Reduction Amount
(as adjusted for inflation) is computed as
follows:
§ 45I(b)(2) Red. AmountApp. Ref. Price – 2.17
=
0.650.43
Solving for the § 45I(b)(2) Red. Amount yields the following formula:
0.65 x (App. Ref. Price – 2.17)
§ 45I(b)(2) Red. Amount =
0.43
Using the applicable reference price of
$2.55, the § 45I(b)(2) Reduction Amount
is $0.57. Therefore, the credit amount
used to calculate the MWC for taxable
years beginning in calendar year 2019 is
$0.08 per mcf ($0.65 - $0.57).
SECTION 5. EFFECTIVE DATE
This notice is effective for qualified
natural gas production during taxable
years beginning in calendar year 2019.
SECTION 6. DRAFTING AND
CONTACT INFORMATION
The principal author of this notice is
Charles Hyde of the Office of Associate
Chief Counsel (Passthroughs & Special
Industries). For further information re-
garding this notice contact Mr. Hyde at
(202) 317-6853 (not a toll-free number).

Notice Proposing Revenue
Procedure Updating Group
Exemption Letter Program
Notice 2020-36
PURPOSE
This notice contains a proposed rev-
enue procedure that sets forth updated
procedures under which recognition of
exemption from federal income tax for
organizations described in § 501(c) of the
Internal Revenue Code (Code) may be
obtained on a group basis for subordinate
organizations affiliated with and under the
general supervision or control of a cen-
tral organization. The proposed revenue
procedure also sets forth updated proce-
dures a central organization must follow
to maintain a group exemption letter.
The proposed revenue procedure would
modify and supersede Rev. Proc. 80-27,
1980-1 C.B. 677 (as modified by Rev.
Proc. 96-40, 1996-2 C.B. 301). The Inter-
nal Revenue Service (IRS) is issuing this
guidance in proposed form to provide an
opportunity for public comment because
the IRS recognizes that, if finalized, the
proposed revenue procedure would make
substantial changes to the procedures set
forth in Rev. Proc. 80-27 and that the ap-
plication of these new procedures may
impose an additional administrative bur-
den on central organizations with group
exemption letters in existence on the date
the final revenue procedure is published in
the Internal Revenue Bulletin (preexisting
group exemption letters).
BACKGROUND
The IRS oversees more than 4,000
group exemption letters that include more
than 440,000 subordinate organizations.
The IRS has considered how to reduce
the administrative burden and increase the
efficiency of the group exemption letter
program, to improve the integrity of data
collected for purposes of program over-
sight, to increase the transparency of the
program, and to increase compliance by
central organizations and subordinate or-
ganizations with program requirements.
For example, Rev. Proc. 80-27 requires a
central organization to submit certain in-
formation regarding its subordinate orga-
nizations to the IRS annually in advance
of the close of its accounting period. To
facilitate the provision of information un-
der this requirement, the IRS historically
mailed each central organization a list of
its subordinate organizations for verifica-
tion and return. As of January 1, 2019, the
IRS stopped providing these lists to cen-
tral organizations because the provision of
such lists was not required and imposed
a significant administrative burden on the
IRS.
Many of the IRS’s goals for the pro-
gram are attainable only by updating the
procedures currently described in Rev.
Proc. 80-27. Accordingly, this notice con-
tains a proposed revenue procedure that
would make such changes if it is finalized.
This notice discusses the changes the pro-
posed revenue procedure would make to
Rev. Proc. 80-27 and explains the reasons
for the proposed changes and how the pro-
posed changes would affect preexisting
group exemption letters.
SUMMARY AND EXPLANATION OF
CHANGES
In general
The proposed revenue procedure is
intended to be a comprehensive resource
regarding group exemption letters. Ac-
cordingly, information located in other
guidance, such as in the Treasury Regu-
lations or other revenue procedures, has
been incorporated into the proposed rev-

Bulletin No. 2020–21 841 May 18, 2020
enue procedure, including, but not limited
to, information with respect to the filing
of group returns (as described in section
7 of the proposed revenue procedure) and
donor or contributor reliance on group ex-
emption letters (as described in section 12
of the proposed revenue procedure).
The proposed revenue procedure uses
formatting similar to Rev. Proc. 2020-5,
2020-1 I.R.B. 241 (updated annually) and
includes much of the same information but
specifically tailored to apply to group ex-
emption letters. For example, the proposed
revenue procedure states when the IRS will
issue a group exemption letter (see section
4 of the proposed revenue procedure) and
under what circumstances the IRS may
terminate a group exemption letter (see
section 8 of the proposed revenue proce-
dure). The proposed revenue procedure
describes how a subordinate organization
may obtain recognition of exemption or
declare its exempt status (without obtain-
ing recognition from the IRS), as applica-
ble, if the IRS does not accept a request
for a group exemption letter or declines
to issue a group exemption letter or if the
IRS or the central organization terminates
the group exemption letter (in its entirety
or only with respect to a particular subor-
dinate organization) (see section 9.04 of
the proposed revenue procedure). The pro-
posed revenue procedure explains how the
effective date of exemption is determined
in each of these circumstances (see section
10 of the proposed revenue procedure). In
particular, the proposed revenue procedure
explains that, if a group exemption letter is
terminated with respect to all subordinate
organizations, a subordinate organization
required to file an application for recogni-
tion of exemption has 27 months from the
date of termination to obtain recognition of
its exemption to avoid interruption of its
exempt status (see section 10.03(1) of the
proposed revenue procedure).
Statutory changes
The proposed revenue procedure up-
dates the procedures currently described
in Rev. Proc. 80-27 by incorporating
changes to the Code enacted since its pub-
lication in January of 1980.
(1) Automatic revocation.
The proposed revenue procedure clar-
ifies the application of § 6033(j) to sub-
ordinate organizations. Section 6033(j)
automatically revokes an organization’s
exemption if the organization fails to file
a required annual return or notice (as de-
fined in section 2.05 of the proposed rev-
enue procedure with reference to § 6033)
for three consecutive years. See Pension
Protection Act of 2006, Public Law 109-
280 (120 Stat. 780 (2006)). The proposed
revenue procedure explains that a subordi-
nate organization that has had its exemp-
tion automatically revoked (within the
meaning of section 2.06 of the proposed
revenue procedure) and has not yet had
its exemption reinstated after filing an
application for reinstatement (within the
meaning of section 2.07 of the proposed
revenue procedure) is not eligible for ini-
tial inclusion in or subsequent addition
to a group exemption letter (see section
3.04(5) of the proposed revenue proce-
dure). A subordinate organization will be
removed from a group exemption letter
if its exemption is automatically revoked
(see section 8.02(1)(c) of the proposed
revenue procedure). When submitting the
information required annually to maintain
a group exemption letter (supplemental
group ruling information, or SGRI, dis-
cussed in section 6 of the proposed rev-
enue procedure), the central organization
must notify the IRS of any subordinate
organizations that are no longer includ-
ed in the group exemption letter because
such subordinate organizations have had
their exemption automatically revoked
(see section 6.02(2)(a)(ii) of the proposed
revenue procedure). Under the proposed
revenue procedure, the IRS may termi-
nate a group exemption letter with respect
to all subordinate organizations if more
than half of the subordinate organizations
have had their exemption automatically
revoked (see section 8.01(1)(g) of the pro-
posed revenue procedure).
(2) Notification of intent to operate as
an organization described in § 501(c)(4).
Section 5.03(3)(c) of the proposed rev-
enue procedure explains the application
of § 506 to subordinate organizations.
Section 506 requires an organization de-
scribed in § 501(c)(4) to notify the Secre-
tary that it is operating as an organization
described in § 501(c)(4) no later than 60
days after the organization is established.
See Protecting Americans from Tax Hikes
Act of 2015, Public Law 114-113, Div.
Q (129 Stat. 2242 (2015)) (PATH Act).
Section 5.03(3)(c) of the proposed reve-
nue procedure explains that a subordinate
organization described in § 501(c)(4) that
is included in (or subsequently added to)
a group exemption letter must follow the
procedures described in Rev. Proc. 2016-
41, 2016-30 I.R.B. 165, and submit a
completed electronic Form 8976, “Notice
of Intent to Operate Under Section 501(c)
(4).” This section explains that a sub-
ordinate organization may authorize an
individual representing the central orga-
nization to submit Form 8976 on the sub-
ordinate organization’s behalf and to re-
ceive any communications relating to the
subordinate organization’s submission.
Proposed modifications to Rev.
Proc. 80-27
The proposed revenue procedure would
make additional modifications to the pro-
cedures currently described in Rev. Proc.
80-27. In general, the changes are intend-
ed: to increase efficiency, transparency,
and compliance with the group exemption
letter program; to improve the central or-
ganization’s ability to exercise general
supervision or control over its subordinate
organizations; and to reduce the adminis-
trative burden on the IRS. A transition rule
and a grandfather rule (both discussed in
the “Applicability” section of this notice
and in section 14 of the proposed revenue
procedure) address how these changes
would apply to preexisting group exemp-
tion letters.
(1) Central organization requirements
to obtain and maintain a group exemption
letter.
The proposed revenue procedure in-
cludes two requirements a central orga-
nization must satisfy to obtain and main-
tain a group exemption letter in addition
to the requirement set forth in Rev. Proc.
80-27 that a central organization must be
described in § 501(c) or must be an in-
strumentality or an agency of a political
subdivision. First, Rev. Proc. 80-27 does
not require a central organization to have
a specific number of subordinate organi-
zations to obtain or to maintain a group
exemption letter. Both Rev. Proc. 80-27
and section 2.02 of the proposed revenue
procedure define the term “central organi-
zation” as an organization that has one or

May 18, 2020 842 Bulletin No. 2020–21
more subordinate organizations under its
general supervision or control. Howev-
er, the administrative burden of process-
ing one group exemption letter request is
comparable to the administrative burden
of processing four applications (as defined
in section 2.04 of the proposed revenue
procedure). Furthermore, more than 300
group exemption letters in existence when
the project was conducted included no
subordinate organizations but consider-
able resources are required to administer
the program for these group exemption
letters. Accordingly, section 3.01(2) of
the proposed revenue procedure requires
a central organization to have at least
five subordinate organizations to obtain
a group exemption letter and at least one
subordinate organization to maintain the
group exemption letter thereafter.
Second, Rev. Proc. 80-27 does not lim-
it the number of group exemption letters a
central organization may maintain. How-
ever, maintaining more than one group
exemption letter may adversely affect the
central organization’s ability to exercise
general supervision or control over its
subordinate organizations. Traditionally,
IRS electronic databases have not sys-
temically tracked more than one group
exemption letter for each central organi-
zation. Accordingly, section 3.01(3) of the
proposed revenue procedure provides that
a central organization may maintain only
one group exemption letter.
(2) The central organization’s relation-
ship with its subordinate organizations.
Consistent with Rev. Proc. 80-27, sec-
tion 3.02(1) of the proposed revenue pro-
cedure requires a central organization to
establish that each subordinate organiza-
tion to be included in the group exemption
letter be affiliated with the central organi-
zation and subject to its general supervi-
sion or control. Rev. Proc. 80-27, howev-
er, does not define the terms “affiliation,”
“general supervision,” or “control.” This
lack of definition has caused confusion
and created a lack of consistency for both
the IRS and central organizations. Ac-
cordingly, these terms are described in
greater detail in sections 3.02(2), 3.02(3),
and 3.02(4) of the proposed revenue pro-
cedure. Further, section 3.02(5) of the
proposed revenue procedure provides that
the descriptions of “general supervision”
and “control” apply only for purposes
of the proposed revenue procedure and
§ 1.6033-2(d) of the Treasury Regulations
(relating to group returns).
(3) Organizations eligible for initial
inclusion in or subsequent addition to a
group exemption letter as subordinate or-
ganizations.
The proposed revenue procedure de-
scribes four new requirements that a sub-
ordinate organization must meet for initial
inclusion in or subsequent addition to a
group exemption letter.
(a) Matching requirements.
Rev. Proc. 80-27 provides that the
central organization must establish that
all subordinate organizations included in
a group exemption letter request are de-
scribed in the same paragraph of § 501(c),
though not necessarily the paragraph
in which the central organization is de-
scribed. Thus, under Rev. Proc. 80-27, a
central organization described in § 501(c)
(3) may have a group exemption letter
for subordinate organizations described
in § 501(c)(4). Section 3.03(2)(a)(i) of
the proposed revenue procedure retains
the requirement that all subordinate orga-
nizations be described in the same para-
graph of § 501(c). However, permitting a
central organization to have subordinate
organizations described in a paragraph of
§ 501(c) that is different from the para-
graph describing the central organization
limits the central organization’s ability
to exercise general supervision or con-
trol over its subordinate organizations.
Accordingly, section 3.03(2)(a)(ii) of the
proposed revenue procedure requires all
subordinate organizations initially includ-
ed in or subsequently added to a group ex-
emption letter to be described in the same
paragraph of § 501(c) as the central orga-
nization. For example, if a central organi-
zation is described in § 501(c)(3), all the
subordinate organizations initially includ-
ed in or subsequently added to the group
exemption letter must be described in
§ 501(c)(3). Nonetheless, section 3.03(2)
(a)(iii) of the proposed revenue procedure
explains that, if the central organization is
either an instrumentality or an agency of a
political subdivision and is not described
in § 501(c), the matching requirement in
section 3.03(2)(a)(ii) of the proposed rev-
enue procedure does not apply. Accord-
ingly, such a central organization may ob-
tain and maintain a group exemption letter
for subordinate organizations described
in any paragraph of § 501(c) (provided
that the eligibility requirements of section
3.03 of the proposed revenue procedure
are met), as long as all the subordinate
organizations are described in the same
paragraph of § 501(c) (see section 3.03(2)
(a)(i) of the proposed revenue procedure).
For example, a state college or university
may obtain and maintain a group exemp-
tion letter for organizations described in
§ 501(c)(3), provided that the state college
or university can establish that it is a qual-
ified governmental agency.
(b) Foundation classification require-
ment.
The second new requirement for initial
inclusion in or subsequent addition to a
group exemption letter introduced by the
proposed revenue procedure involves the
foundation classification of subordinate
organizations described in § 501(c)(3).
Rev. Proc. 80-27 does not require subor-
dinate organizations described in § 501(c)
(3) to have any particular foundation clas-
sification under § 509(a) (other than the
prohibition of subordinate organizations
that are private foundations). Tradition-
ally, IRS electronic databases have not
systemically tracked multiple foundation
classifications in connection with a par-
ticular group exemption letter. This lim-
itation reduces transparency, complicates
compliance, and increases the adminis-
trative burden because different foun-
dation classifications have different re-
quirements. Accordingly, section 3.03(2)
(b)(i) of the proposed revenue procedure
provides that, if the subordinate organiza-
tions initially included in or subsequent-
ly added to a group exemption letter are
described in § 501(c)(3), all such subor-
dinate organizations must be classified as
public charities under the same paragraph
of § 509(a).
Subordinate organizations described in
§ 501(c)(3) and classified under § 509(a)
(1) are not required to be classified under
the same paragraph of § 170(b)(1)(A). For
example, subordinate organizations de-
scribed in § 501(c)(3) that are classified
under § 509(a)(1) as churches described
in § 170(b)(1)(A)(i), educational organi-
zations described in § 170(b)(1)(A)(ii), or
hospitals described in § 170(b)(1)(A)(iii)
may all be initially included in or subse-
quently added to the same group exemp-

Bulletin No. 2020–21 843 May 18, 2020
tion letter, provided that the other require-
ments of the proposed revenue procedure
are satisfied. Nonetheless, the IRS is con-
sidering how, and the extent to which, this
requirement may affect a central organiza-
tion’s ability to exercise general supervi-
sion or control over its subordinate organi-
zations and, after an appropriate transition
period, eventually may require all sub-
ordinate organizations classified under
§ 509(a)(1) to be classified under the same
paragraph of § 170(b)(1)(A).
Public support is calculated annually
and may change from year to year. See
§§ 170(b)(1)(A)(vi) & 509(a)(1) & (2).
Thus, for purposes of the foundation clas-
sification requirement described in the
proposed revenue procedure, a subordi-
nate organization classified under § 509(a)
(1) and described in § 170(b)(1)(A)(vi)
will be considered as having the same
foundation classification as a subordinate
organization classified under § 509(a)(2),
and vice versa.
Additionally, subordinate organiza-
tions described in § 501(c)(3) are not
required to be classified under the same
paragraph of § 509(a) as the central or-
ganization. For example, subordinate or-
ganizations classified as hospitals under
§§ 509(a)(1) and 170(b)(1)(A)(iii) may
be included in a group exemption letter
maintained by a central organization that
is a Type III supporting organization de-
scribed in § 509(a)(3).
(c) Similar purpose requirement.
The third new requirement for ini-
tial inclusion in or subsequent addition
to a group exemption letter adheres to
the original intent of the group exemp-
tion letter program by requiring certain
subordinate organizations included in a
group exemption letter to have the same
or similar purposes. This requirement will
facilitate the central organization’s exer-
cise of general supervision or control and
reduce the administrative burden of the
group exemption letter program. There-
fore, section 3.03(2)(c) of the proposed
revenue procedure requires all subordi-
nate organizations described in § 501(c)
(other than § 501(c)(3)) initially included
in or subsequently added to a group ex-
emption letter to be described by the same
National Taxonomy of Exempt Entities
(NTEE) Code (as defined in section 2.08
of the proposed revenue procedure). In
this case, the proposed revenue procedure
directs a central organization requesting a
group exemption letter to visit the Urban
Institute, National Center for Charitable
Statistics, website at nccs.urban.org for a
complete list of NTEE codes.
The IRS has chosen to use NTEE
codes, rather than a different coding sys-
tem, such as the North American Industry
Classification System, because the NTEE
codes were created specifically to describe
the activities engaged in by exempt orga-
nizations that further one or more exempt
purposes. Indeed, the IRS already requires
organizations applying for recognition un-
der § 501(c)(3) to enter the NTEE code
that best describes the organization’s ac-
tivities on Form 1023-EZ, “Streamlined
Application for Recognition of Exemption
Under Section 501(c)(3) of the Internal
Revenue Code.”
Subordinate organizations described in
§ 501(c)(3) initially included in or subse-
quently added to a group exemption letter
are not required to have the same primary
purpose (and therefore are not required
to provide an NTEE code), because, al-
though such subordinate organizations
must be classified in the same paragraph of
§ 509(a), such subordinate organizations
may have different religious, charitable,
educational, or other exempt purposes.
(d) Uniform governing instrument re-
quirement.
The fourth new requirement for initial
inclusion in or subsequent addition to a
group exemption letter introduced by the
proposed revenue procedure is a modi-
fication to the requirement in Rev. Proc.
80-27 directing a central organization to
include a sample copy the governing in-
strument adopted by the subordinate or-
ganizations with its request for a group
exemption letter. If a uniform governing
instrument is not used, Rev. Proc. 80-27
requires the central organization to sub-
mit copies of representative instruments.
However, governing instruments that are
not uniform are not consistent with the
similar purpose requirement. Accordingly,
section 3.03(2)(d) of the proposed revenue
procedure eliminates the option of submit-
ting copies of representative instruments
in the absence of a uniform governing
instrument and requires all subordinate
organizations to adopt a uniform govern-
ing instrument. Section 5.03(2)(a) of the
proposed revenue procedure requires the
central organization to submit a copy of
the uniform governing instrument with
its request for a group exemption letter.
Representative instruments are no longer
acceptable for this purpose.
Section 3.03(2)(d) of the proposed
revenue procedure includes an exception
for subordinate organizations described
in § 501(c)(3) because, under the foun-
dation classification requirement, such
subordinate organizations may have dif-
ferent religious, charitable, educational,
or other exempt purposes and because the
similar purpose requirement does not ap-
ply to subordinate organizations described
in § 501(c)(3). Accordingly, the proposed
revenue procedure allows the governing
instruments of subordinate organizations
described in § 501(c)(3) to describe dif-
ferent purposes. The proposed revenue
procedure further explains that, if a group
exemption letter includes subordinate or-
ganizations described in § 501(c)(3) with
different purposes, the governing instru-
ment describing each purpose should be a
uniform governing instrument. For exam-
ple, if a group exemption letter includes
subordinate organizations that are schools
and hospitals, all the subordinate orga-
nizations that are schools should adopt a
uniform governing instrument describing
their educational purpose and all the sub-
ordinate organizations that are hospitals
should adopt a uniform governing instru-
ment describing their charitable purpose.
(4) Organizations not eligible for in-
clusion in or subsequent addition to a
group exemption letter as subordinate or-
ganizations.
Rev. Proc. 80-27 states that a group ex-
emption letter may not include any sub-
ordinate organization that is organized
and operated in a foreign country or that
is described in § 501(c)(3) and classified
as a private foundation under § 509(a).
The proposed revenue procedure gener-
ally retains these requirements, except it
permits a subordinate organization to op-
erate in a foreign country, provided that
it is organized in the United States. More
specifically, section 3.04(1) of the pro-
posed revenue procedure provides that a
subordinate organization that is organized
in a foreign country may not be initially
included in or subsequently added to a
group exemption letter. A subordinate or-

May 18, 2020 844 Bulletin No. 2020–21
ganization that is organized in the United
States is subject to federal tax law even if
it operates in a foreign country, and a cen-
tral organization therefore should be able
to exercise general supervision or control
over such a subordinate organization. In
addition, section 3.04(2) of the proposed
revenue procedure states that an organiza-
tion described in § 501(c)(3) that is classi-
fied as a private foundation under § 509(a)
is not eligible for initial inclusion in or
subsequent addition to a group exemption
letter as a subordinate organization.
The proposed revenue procedure also
provides that other types of organiza-
tions may not be initially included in or
subsequently added to a group exemption
letter as subordinate organizations. Sec-
tions 3.04(3) and 3.04(4) of the proposed
revenue procedure state that neither an
organization described in § 501(c)(3) that
is classified as a Type III supporting orga-
nization under § 509(a)(3) nor a qualified
nonprofit health insurance issuer (QNHII)
described in § 501(c)(29) is eligible for
initial inclusion in or subsequent addition
to a group exemption letter as a subordi-
nate organization. Both Type III support-
ing organizations and QNHIIs are subject
to complex requirements. Permitting these
types of organizations to be subordinate
organizations would not be in the sound
interest of tax administration because of
the complexity of the rules governing such
organizations and, in the case of Type III
supporting organizations, the history of
abuse associated with such organizations.
Additionally, section 3.04(5) of the
proposed revenue procedure states that an
organization that has had its exemption
automatically revoked and that has not
yet had its exemption reinstated after fil-
ing an application for reinstatement may
not be initially included in or subsequent-
ly added to a group exemption letter as a
subordinate organization. An organization
that has had its exemption automatically
revoked is required to apply for reinstate-
ment under § 6033(j)(2). However, unlike
the other types of organizations that may
not be initially included in or subsequent-
ly added to a group exemption letter as
subordinate organizations, such as private
foundations, an organization that has had
its exemption automatically revoked is
eligible to become a subordinate organi-
zation after it has filed an application for
reinstatement and has had its exemption
reinstated, provided that it meets the oth-
er requirements of the proposed revenue
procedure.
(5) Authorization for initial inclusion
in or subsequent addition to a group ex-
emption letter.
Rev. Proc. 80-27 requires a subordi-
nate organization to authorize the central
organization to include it in the request for
a group exemption letter. Section 3.05(1)
of the proposed revenue procedure retains
this requirement, but section 3.05(2) of
the proposed revenue procedure adds the
requirement that the authorization permit
the central organization to remove the
subordinate organization from the group
exemption letter if the subordinate orga-
nization fails to comply with the require-
ments of the proposed revenue procedure.
Consistent with Rev. Proc. 80-27, section
3.05(3) of the proposed revenue procedure
requires the central organization to retain
the authorization but clarifies that the cen-
tral organization must retain the authoriza-
tion only while the group exemption letter
includes the particular subordinate organi-
zation, rather than for the entire duration
the group exemption letter is in effect.
(6) Information required to maintain a
group exemption letter.
Both Rev. Proc. 80-27 and the pro-
posed revenue procedure require a central
organization to submit certain information
(supplemental group ruling information,
or SGRI) annually to maintain a group ex-
emption letter. Under section 6.01 of the
proposed revenue procedure, a central or-
ganization must submit the SGRI at least
30 days, rather than 90 days as required
by Rev. Proc. 80-27, before the close of
its annual accounting period. This change
is intended to increase the accuracy of the
SGRI submitted by the central organiza-
tion. Nonetheless, the proposed revenue
procedure explains that a central organi-
zation may provide additional updates at
any time. Section 6.05 of the proposed
revenue procedure includes the exception
to the SGRI filing requirement originally
included in Pub. 4573 for central organi-
zations described in § 501(c)(3) that are
churches or conventions or associations of
churches. More specifically, section 6.05
of the proposed revenue procedure pro-
vides that a central organization that is a
church or a convention or association of
churches may, but is not required to, sub-
mit the SGRI.
(7) Declaratory judgment provisions of
§ 7428.
In 1976, Congress enacted § 7428 to
permit organizations described in § 501(c)
(3) to file a declaratory judgment action in
the case of an actual controversy involv-
ing determinations made by the IRS. See
Tax Reform Act of 1976, Public Law 94-
455 (90 Stat. 1520 (1976)). The PATH Act
extended application of § 7428 to all orga-
nizations described in § 501(c).
Rev. Proc. 80-27 does not address the
application of § 7428 to either central or-
ganizations or subordinate organizations.
Nevertheless, questions exist regarding
how the statute applies in the context of
group exemption letters. Accordingly, sec-
tion 11 of the proposed revenue procedure
explains when § 7428 applies in the group
exemption letter context. With respect to a
central organization, section 11.02 of the
proposed revenue procedure clarifies that
section 10.02 of Rev. Proc. 2020-5 (or its
successor) describes when § 7428 applies.
With respect to subordinate organizations,
section 11.03 of the proposed revenue pro-
cedure describes the limited circumstanc-
es in which § 7428 applies.
Section 11.03(1) of the proposed rev-
enue procedure explains that § 7428 ap-
plies to a final determination by the IRS
that a subordinate organization is no lon-
ger described in § 501(c) and therefore is
not exempt under § 501(a). Such a deter-
mination occurs when the IRS terminates
a group exemption letter with respect to a
particular subordinate organization under
section 8.02(1)(b)(i) of the proposed rev-
enue procedure. Section 11.03(2) of the
proposed revenue procedure explains that
§ 7428 also applies to a final determination
by the IRS that a subordinate organization
was not eligible for initial inclusion in or
subsequent addition to a group exemption
letter under section 3.04 of the proposed
revenue procedure (other than under sec-
tion 3.04(5) of the proposed revenue pro-
cedure regarding automatic revocation).
Such a determination occurs when the
IRS terminates a group exemption letter
with respect to a particular subordinate or-
ganization under section 8.02(1)(b)(ii) of
the proposed revenue procedure. Section
11.04 of the proposed revenue procedure
explains that § 7428 does not apply to cer-

Bulletin No. 2020–21 845 May 18, 2020
tain other actions the IRS may take, such
as not accepting a group exemption letter
request for a reason described in section
4.02 of the proposed revenue procedure or
declining to issue a group exemption letter
for a reason described in section 4.03 of
the proposed revenue procedure.
Section 11.05 of the proposed revenue
procedure explains that a subordinate or-
ganization must file the declaratory judg-
ment action under § 7428 with respect to
a determination affecting its own initial or
continuing qualification or classification;
the central organization may not file the
declaratory judgment action under § 7428
on behalf of the subordinate organization.
Similarly, a subordinate organization may
not file a declaratory judgment action un-
der § 7428 on behalf of its central organi-
zation.
Applicability
The proposed revenue procedure will
apply to group exemption letters request-
ed and issued after the date the final rev-
enue procedure is published in the Internal
Revenue Bulletin and to preexisting group
exemption letters (see sections 14.01 and
14.02 of the proposed revenue procedure).
However, section 14.02(2)(a) of the pro-
posed revenue procedure provides that the
requirements that a central organization
have at least one subordinate organization
to maintain a group exemption letter (see
section 3.01(2) of the proposed revenue
procedure) and that the central organiza-
tion maintain only one group exemption
letter (see section 3.01(3) of the proposed
revenue procedure) will apply after a one
year transition period. Section 14.02(2)(b)
of the proposed revenue procedure directs
a central organization with a preexisting
group exemption letter, but no preexisting
subordinate organizations, to add at least
one subordinate organization to the preex-
isting group exemption letter or to notify
the IRS of its intent to terminate the group
exemption letter. Section 14.02(2)(c) of the
proposed revenue procedure directs a cen-
tral organization with more than one preex-
isting group exemption letter to determine,
during the transition period, which, if any,
preexisting group exemption letter it in-
tends to maintain and to notify the IRS of
its intent to terminate any additional preex-
isting group exemption letters.
The proposed revenue procedure will
apply to all new subordinate organizations
added to a preexisting group exemption
letter (see sections 2.11 and 14.02(3) of
the proposed revenue procedure). Section
14.02(3)(b) of the proposed revenue pro-
cedure describes the information a central
organization must submit the first time it
adds one or more subordinate organiza-
tions to a preexisting group exemption
letter.
The proposed revenue procedure gen-
erally will apply to preexisting subordi-
nate organizations (as defined in section
2.10 of the proposed revenue procedure).
However, section 14.02(4)(b)(i) through
(iii) of the proposed revenue procedure
provide a grandfather rule with respect to
certain requirements in the proposed reve-
nue procedure. In particular, the following
definitions and rules will not apply to pre-
existing subordinate organizations:
• the definitions of “general supervi-
sion” or “control” in sections 3.02(3)
and 3.02(4) of the proposed revenue
procedure;
• the matching, foundation classifica-
tion, similar purpose, and uniform
governing instrument requirements in
section 3.03(2) of the proposed reve-
nue procedure; and
• the limitation applicable to Type III
supporting organizations in section
3.04(3) of the proposed revenue pro-
cedure.
Instead, definitions and rules similar to
those contained in Rev. Proc. 80-27 will
apply. Section 14.02(4)(c) of the proposed
revenue procedure clarifies that preex-
isting subordinate organizations must all
be described in the same paragraph of
§ 501(c), though not necessarily the same
paragraph as the central organization;
preexisting subordinate organizations de-
scribed in § 501(c)(3) may be classified
in any paragraph of § 509(a) (including
§ 509(a)(3)); and all preexisting subordi-
nate organizations may have different pri-
mary purposes and unique, as opposed to
“uniform,” governing instruments.
Additionally, section 14.02(4)(b)(iv) of
the proposed revenue procedure provides
that the requirement that the authorization
for initial inclusion in or subsequent addi-
tion to a group exemption letter described
in section 3.05(1) of the proposed revenue
procedure permit the central organization
to remove a subordinate organization in
certain circumstances does not apply to
preexisting subordinate organizations.
The IRS recognizes that imposing this
requirement on preexisting group exemp-
tion letters could require the central orga-
nization to obtain new authorizations from
all of its preexisting subordinate organiza-
tions, which would likely impose a con-
siderable administrative burden on many
central organizations.
Although the definitions of “gener-
al supervision” or “control” in sections
3.02(3) and 3.02(4) of the proposed reve-
nue procedure do not apply to preexisting
group exemption letters, section 14.02(4)
(e) of the proposed revenue procedure
explains that a central organization that
meets the requirements of section 3.02(3)
or section 3.02(4) of the proposed revenue
procedure with respect to a particular pre-
existing subordinate organization will be
deemed to exercise “general supervision”
or “control,” as applicable, over that pre-
existing subordinate organization.
Finally, section 14.03 of the proposed
revenue procedure provides examples of
how the grandfather and transition rules
function.
REQUEST FOR COMMENTS
The IRS requests comments on all as-
pects of the proposed revenue procedure,
including the grandfather and transition
rules. In particular, the IRS requests com-
ments regarding:
• the administrative burden imposed
by the collections of information in
sections 3.02(3) (certain information
a central organization that exercises
general supervision over its subor-
dinate organizations must annually
collect from its subordinate organiza-
tions and transmit to its subordinate
organizations), 3.05 (authorization
for initial inclusion in or subsequent
addition to a group exemption letter
as a subordinate organization), and 6
(SGRI) of the proposed revenue pro-
cedure;
• factors indicating that a subordinate
organization is affiliated with a cen-
tral organization for purposes of sec-
tion 3.02(2) of the proposed revenue
procedure (description of affiliation);
and

May 18, 2020 846 Bulletin No. 2020–21
• whether central organizations with
more than one preexisting group ex-
emption letter would benefit from
procedures permitting the consolida-
tion or transfer of one or more preex-
isting group exemption letters.
Comments should be submitted on or
before August 16, 2020. Please include
Notice 2020-36 on the cover page. Com-
ments should be sent to the following ad-
dress:
Internal Revenue Service
CC:PA:LPD:PR (Notice 2020-
36), Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044
Submissions may be hand delivered
Monday through Friday between the
hours of 8 a.m. and 4 p.m. to:
Internal Revenue Service
Courier’s Desk
1111 Constitution Ave., N.W.
Washington, DC 20224
Attn: CC:PA:LPD:PR (Notice
2020-36)
Submissions may also be sent electron-
ically to the following e-mail address:
Notice.Comments@irscounsel.
treas.gov.
Please include “Notice 2020-36” in the
subject line.
All comments will be available for
public inspection and copying.
CONTINUED APPLICATION OF REV.
PROC. 80-27
Pending publication of the final rev-
enue procedure in the Internal Revenue
Bulletin, Rev. Proc. 80-27 continues to
apply. However, the IRS will not accept
any requests for group exemption let-
ters starting on June 17, 2020 (30 days
after publication of this notice in the
Internal Revenue Bulletin) until publi-
cation of the final revenue procedure or
other guidance in the Internal Revenue
Bulletin.
DRAFTING INFORMATION
The principal authors of this notice are
Seth J. Groman and Stephanie N. Robbins
of the Office of Associate Chief Counsel
(Employee Benefits, Exempt Organiza-
tions and Employment Taxes). For further
information regarding this notice contact
Seth J. Groman at (202) 317-4086 (not a
toll-free number).

Bulletin No. 2020–21 847 May 18, 2020
PROPOSED REVENUE PROCEDURE
TABLE OF CONTENTS
SECTION 1. PURPOSE
SECTION 2. DEFINITIONS
SECTION 3. REQUIREMENTS TO OBTAIN AND MAINTAIN A GROUP EXEMPTION LETTER
.01 Central organization
(1) Exemption
(2) Minimum number of subordinate organizations
(3) Only one group exemption letter
.02 The central organization’s relationship with its subordinate organizations
(1) In general
(2) Affiliation
(3) General supervision
(4) Control
(5) Application
.03 Organizations eligible for initial inclusion in or subsequent addition to a group exemption letter as subordinate organizations
(1) In general
(2) Requirements for initial inclusion in or subsequent addition to a group exemption letter
.04 Organizations not eligible for initial inclusion in or subsequent addition to a group exemption letter as subordinate organiza-
tions
.05 Authorization for initial inclusion in or subsequent addition to a group exemption letter as a subordinate organization
(1) In general
(2) Removal
(3) Retention of the authorization by the central organization
.06 Employer identification numbers (EINs)
.07 Annual information return or notice
SECTION 4. ISSUANCE OF GROUP EXEMPTION LETTERS
.01 Group exemption letter requests
.02 Non-acceptance
.03 Circumstances under which group exemption letters are not ordinarily issued
SECTION 5. INSTRUCTIONS FOR REQUESTING A GROUP EXEMPTION LETTER
.01 Group exemption letter request
.02 Information about the central organization
.03 Information about the subordinate organizations
(1) In general
(2) Supporting information
(3) Additional requirements
.04 Request for a new group exemption letter after the termination of a group exemption letter
SECTION 6. INFORMATION REQUIRED TO MAINTAIN A GROUP EXEMPTION LETTER
.01 Information required annually
.02 Supplemental group ruling information
(1) Changes in purposes or activities
(2) Lists of certain changes, removals, or additions
(3) Organizations to be added to the group exemption letter as subordinate organizations
(4) No change
(5) Intent to terminate the group exemption letter

May 18, 2020 848 Bulletin No. 2020–21
.03 Address
.04 Additional information
.05 Exception for central organizations that are churches or conventions or associations of churches
SECTION 7. ANNUAL FILING REQUIREMENT
.01 In general
.02 Group returns
SECTION 8. TERMINATION OF THE GROUP EXEMPTION LETTER
.01 Termination of the group exemption letter with respect to all subordinate organizations
(1) Termination by the IRS
(2) Termination by the central organization
.02 Termination of the group exemption letter with respect to a particular subordinate organization
(1) Removal from the group exemption letter
(2) Group exemption letter remains in effect
SECTION 9. EFFECT OF NON-ACCEPTANCE, NON-ISSUANCE, TERMINATION, OR REMOVAL
.01 Effect of non-acceptance or non-issuance
.02 Effect of termination
(1) In general
(2) Churches or conventions or associations of churches
.03 Effect of removal
.04 Subsequent recognition of exemption
(1) In general
(2) Organization required to file an application
(3) Organization not required to file an application
(4) Automatic revocation
SECTION 10. EFFECTIVE DATE OF EXEMPTION
.01 Initial inclusion
.02 Subsequent addition
.03 Termination or removal
(1) In general
(2) Automatic revocation
(3) Declaratory judgment action
SECTION 11. DECLARATORY JUDGMENT PROVISIONS OF § 7428
.01 In general
.02 Application to central organizations
.03 Application to subordinate organizations
.04 Actions to which § 7428 does not apply
.05 Who must file
SECTION 12. RELIANCE
.01 By a central or subordinate organization
.02 By grantors and contributors
SECTION 13. DISCLOSURE OF GROUP EXEMPTION LETTER REQUESTS AND GROUP EXEMPTION LETTERS
SECTION 14. APPLICABILITY
.01 New group exemption letters
.02 Preexisting group exemption letters
(1) In general
(2) Certain sections applicable to preexisting group exemption letters after a transition period
(3) New subordinate organizations
(4) Preexisting subordinate organizations
.03 Examples

Bulletin No. 2020–21 849 May 18, 2020
(1) One preexisting group exemption letter for subordinate organizations described in a different paragraph of § 501(c)
than the central organization
(2) One preexisting group exemption letter for subordinate organizations described in the same paragraph of § 501(c) as
the central organization
(3) Two preexisting group exemption letters for subordinate organizations described in different paragraphs of § 501(c)
(4) Central organization that is not described in § 501(c) with two preexisting group exemption letters for subordinate
organizations described in different paragraphs of § 501(c)
(5) One preexisting group exemption letter with no subordinate organizations
(6) One preexisting group exemption letter with subordinate organizations described in different paragraphs of § 501(c)
SECTION 15. EFFECT ON OTHER REVENUE PROCEDURES
SECTION 16. EFFECTIVE DATE

May 18, 2020 850 Bulletin No. 2020–21
SECTION 1. PURPOSE
The purpose of this revenue procedure
is to modify and supersede Rev. Proc. 80-
27, 1980-1 C.B. 677 (as modified by Rev.
Proc. 96-40, 1996-2 C.B. 301) by setting
forth updated procedures under which rec-
ognition of exemption from federal income
tax for organizations described in § 501(c)
of the Internal Revenue Code (Code) may
be obtained on a group basis for subordi-
nate organizations affiliated with and under
the general supervision or control of a cen-
tral organization. This revenue procedure
relieves each subordinate organization
covered by a group exemption letter from
filing its own application for recognition
of exemption. This revenue procedure also
sets forth updated procedures a central or-
ganization must follow to maintain a group
exemption letter. This revenue procedure is
provided as a matter of sound tax adminis-
tration for the administrative convenience
of central organizations and the Internal
Revenue Service (IRS).
SECTION 2. DEFINITIONS
.01 The term “group exemption letter”
means a letter issued to a central organi-
zation recognizing on a group basis the
exemption of subordinate organizations
described in § 501(c) on whose behalf the
central organization has applied for rec-
ognition of exemption in accordance with
this revenue procedure.
.02 The term “central organization”
means an organization that has one or
more subordinate organizations under its
general supervision or control.
.03 The term “subordinate organiza-
tion” means a chapter, local, post, or unit
of a central organization. It may or may
not be incorporated, but it must have an
organizing document (see section 3.03(2)
(d) of this revenue procedure).
.04 The term “application” means a re-
quest for recognition of exemption from
federal income tax under § 501 in the
manner described by Rev. Proc. 2020-5,
2020-1 I.R.B. 241 (or its successor).
.05 The term “annual information return
or notice” means the return or notice an orga-
nization must file annually under § 6033(a)
or § 6033(i) (that is, Form 990, “Return of
Organization Exempt From Income Tax”;
Form 990-EZ, “Short Form Return of Or-
ganization Exempt From Income Tax”; or
Form 990-N, “Electronic Notice (e-Post-
card) for Tax-Exempt Organizations Not Re-
quired to File Form 990 or Form 990-EZ”).
.06 The term “automatically revoked”
refers to an organization that has had its
exemption automatically revoked by oper-
ation of § 6033(j) for failure to file an an-
nual information return or notice for three
consecutive years.
.07 The term “application for reinstate-
ment” means an application filed in the
manner described by Rev. Proc. 2014-11,
2014-3 I.R.B. 411, as supplemented by
Rev. Proc. 2020-5 (or its successor), after
an organization’s exemption has been au-
tomatically revoked.
.08 The term “National Taxonomy of Ex-
empt Entities code” or “NTEE code” means
a three-character series of letters and num-
bers that is used to classify an organization.
For a complete list of NTEE codes, visit the
Urban Institute, National Center for Charita-
ble Statistics website at nccs.urban.org.
.09 The term “preexisting group ex-
emption letter” means a group exemption
letter in existence on the date the final rev-
enue procedure is published in the Internal
Revenue Bulletin.
.10 The term “preexisting subordinate
organization” means, with respect to a
preexisting group exemption letter, a sub-
ordinate organization included in the pre-
existing group exemption letter on or be-
fore the date the final revenue procedure is
published in the Internal Revenue Bulletin.
.11 The term “new subordinate organi-
zation” means a subordinate organization
subsequently added to a preexisting group
exemption letter after the date the final
revenue procedure is published in the In-
ternal Revenue Bulletin.
.12 The term “supplemental group rul-
ing information” or “SGRI” means the
information described in section 6 of this
revenue procedure that a central organi-
zation must submit annually to the IRS
about its subordinate organizations unless
an exception applies.
SECTION 3. REQUIREMENTS TO
OBTAIN AND MAINTAIN A GROUP
EXEMPTION LETTER
.01 Central organization. (1) Exemp-
tion. (a) In general. A central organization
must be—
(i) Described in § 501(c);
(ii) An instrumentality; or
(iii) An agency of a political subdivi-
sion.
(b) Recognition of exemption. A central
organization described in § 501(c) (see
section 3.01(1)(a)(i) of this revenue proce-
dure) must obtain recognition of exemp-
tion from the IRS by filing an application
or, in the case of a central organization
that has had its exemption automatically
revoked, by filing an application for rein-
statement.
(2) Minimum number of subordinate
organizations. A central organization
must have at least five subordinate or-
ganizations to obtain a group exemp-
tion letter, and it must have at least one
subordinate organization to maintain the
group exemption letter thereafter (except
as provided in section 14.02(2)(a)(i) of
this revenue procedure, which provides
a transition period for preexisting group
exemption letters).
(3) Only one group exemption letter.
A central organization may maintain only
one group exemption letter (except as
provided in section 14.02(2)(a)(ii) of this
revenue procedure, which provides a tran-
sition period for preexisting group exemp-
tion letters).
.02 The central organization’s relation-
ship with its subordinate organizations.
(1) In general. A central organization must
establish that each subordinate organiza-
tion to be included in the group exemption
letter is affiliated with the central organi-
zation (as described in section 3.02(2) of
this revenue procedure) and subject to its
general supervision (as described in sec-
tion 3.02(3) of this revenue procedure) or
control (as described in section 3.02(4) of
this revenue procedure).
(2) Affiliation. A subordinate organiza-
tion’s affiliation with the central organi-
zation is demonstrated by the entirety of
the information required to be submitted
in section 5.03 of this revenue procedure.
(3) General supervision. A subordi-
nate organization is subject to the central
organization’s general supervision if the
central organization—
(a) annually obtains, reviews, and re-
tains information on the subordinate orga-
nization’s finances, activities, and compli-
ance with annual filing requirements (see
section 7 of this revenue procedure), and

Bulletin No. 2020–21 851 May 18, 2020
(b) transmits written information to
(or otherwise educates) the subordinate
organization about the requirements to
maintain tax-exempt status under the ap-
propriate paragraph of § 501(c), including
annual filing requirements (see section 7
of this revenue procedure).
(4) Control. A subordinate organiza-
tion is subject to the central organization’s
control if—
(a) The central organization appoints a
majority of the subordinate organization’s
officers, directors, or trustees; or
(b) A majority of the subordinate orga-
nization’s officers, directors, or trustees
are officers, directors, or trustees of the
central organization.
(5) Application. The term “general su-
pervision” described in section 3.02(3) of
this revenue procedure and the term “con-
trol” described in section 3.02(4) of this
revenue procedure apply only for purpos-
es of this revenue procedure and § 1.6033-
2(d) of the Treasury Regulations (relating
to group returns).
.03 Organizations eligible for initial
inclusion in or subsequent addition to a
group exemption letter as subordinate
organizations. (1) In general. Unless de-
scribed in section 3.04 of this revenue pro-
cedure and subject to the requirements de-
scribed in section 3.03(2) of this revenue
procedure, an organization described in
§ 501(c) may be eligible for initial inclu-
sion in or subsequent addition to a group
exemption letter as a subordinate organi-
zation.
(2) Requirements for initial inclusion
in or subsequent addition to a group ex-
emption letter. All subordinate organiza-
tions initially included in or subsequently
added to a group exemption letter must
meet the following requirements (except
as provided in section 14.02(4) of this rev-
enue procedure regarding preexisting sub-
ordinate organizations).
(a) Matching requirements. (i) Subor-
dinate organizations. All subordinate or-
ganizations initially included in or subse-
quently added to a group exemption letter
must be described in the same paragraph
of § 501(c).
(ii) Central organization described
in § 501(c). If the central organization is
described in § 501(c), all subordinate or-
ganizations initially included in or subse-
quently added to a group exemption letter
must be described in the same paragraph
of § 501(c) as the central organization,
including a central organization that is ei-
ther an instrumentality or an agency of a
political subdivision and that is described
in § 501(c). For example, if a central orga-
nization is described in § 501(c)(3), all the
subordinate organizations initially includ-
ed in or subsequently added to the group
exemption letter must also be described in
§ 501(c)(3).
(iii) Central organization not described
in § 501(c). If the central organization is
either an instrumentality or an agency of a
political subdivision and is not described
in § 501(c), the matching requirement
described in section 3.03(2)(a)(ii) of this
revenue procedure does not apply. In this
case, such a central organization may have
subordinate organizations described in
any paragraph of § 501(c), provided that
the organizations are eligible to be subor-
dinate organizations (see section 3.04 of
this revenue procedure) and the subordi-
nate organizations initially included in or
subsequently added to the group exemp-
tion letter are all described in the same
paragraph of § 501(c) (see section 3.03(2)
(a)(i) of this revenue procedure).
(b) Foundation classification require-
ment. (i) In general. Except as provided
in section 3.03(2)(b)(iii) of this revenue
procedure, all subordinate organizations
described in § 501(c)(3) that are initially
included in or subsequently added to a
group exemption letter must be classified
as public charities under the same para-
graph of § 509(a) (but see section 3.04(3)
of this revenue procedure, which provides
that an organization described in § 501(c)
(3) that is classified as a Type III support-
ing organization is not eligible to be ini-
tially included in or subsequently added to
a group exemption letter as a subordinate
organization).
(ii) Classification under §§ 509(a)(1)
and 170(b)(1)(A). Subordinate organiza-
tions classified as public charities under
§ 509(a)(1) are not required to be classified
under the same paragraph of § 170(b)(1)
(A). For example, a central organization
described in § 501(c)(3) may have subor-
dinate organizations described in § 501(c)
(3) that are classified as public charities
under § 509(a)(1) but are churches de-
scribed in § 170(b)(1)(A)(i), educational
organizations described in § 170(b)(1)(A)
(ii), and hospitals described in § 170(b)(1)
(A)(iii).
(iii) Publicly supported subordinate
organizations. Because public support un-
der §§ 509(a)(1) and 170(b)(1)(A)(vi) or
under § 509(a)(2) is determined annually
(and therefore may change), subordinate
organizations that are classified as a pub-
licly supported organizations either un-
der §§ 509(a)(1) and 170(b)(1)(A)(vi) or
under § 509(a)(2) will be considered, for
purposes of section 3.03(2)(b)(i) of this
revenue procedure, to be classified in the
same paragraph of § 509(a).
(iv) Foundation classification of the
central organization may differ from the
foundation classification of its subordinate
organizations. Subordinate organizations
described in § 501(c)(3) are not required
to be classified under the same paragraph
of § 509(a) as the central organization.
For example, a central organization that
is classified as a Type III supporting or-
ganization under § 509(a)(3) may have a
group exemption letter with subordinate
organizations classified under § 509(a)(1).
(c) Similar purpose requirement. The
primary purpose of all the subordinate
organizations described in § 501(c) (oth-
er than § 501(c)(3)) initially included in
or subsequently added to a group exemp-
tion letter must be described by the same
NTEE code.
(d) Uniform governing instrument. All
subordinate organizations must adopt a
uniform governing instrument (charter,
trust indenture, articles of association,
etc.). Representative instruments are not
acceptable for this purpose. However, if
a group exemption letter includes subor-
dinate organizations described in § 501(c)
(3) with different purposes, the governing
instrument describing each distinct chari-
table, educational, scientific, etc. purpose
must be a uniform governing instrument.
For example, if a group exemption letter
includes subordinate organizations that
are schools and hospitals, all the subordi-
nate organizations that are schools must
adopt a uniform governing instrument
describing their educational purpose and
all the subordinate organizations that are
hospitals must adopt a uniform governing
instrument describing their charitable pur-
pose.
.04 Organizations not eligible for ini-
tial inclusion in or subsequent addition to

May 18, 2020 852 Bulletin No. 2020–21
a group exemption letter as subordinate
organizations. The following organiza-
tions are not eligible to be initially includ-
ed in or subsequently added to a group
exemption letter as subordinate organiza-
tions:
(1) An organization that is organized in
a foreign country.
(2) An organization described in
§ 501(c)(3) that is classified as a private
foundation under § 509(a).
(3) An organization described in
§ 501(c)(3) that is classified as a Type III
supporting organization under § 509(a)
(3).
(4) A qualified nonprofit health insur-
ance issuer (QNHII) described in § 501(c)
(29).
(5) An organization that has had its ex-
emption automatically revoked and that
has not yet had its exemption reinstated
after filing an application for reinstate-
ment.
.05 Authorization for initial inclusion
in or subsequent addition to a group ex-
emption letter as a subordinate orga-
nization. (1) In general. A subordinate
organization must authorize the central
organization in writing to include the sub-
ordinate organization in the request for the
group exemption letter or to add the sub-
ordinate organization to an existing group
exemption letter. The authorization must
be signed by a duly authorized officer of
the subordinate organization.
(2) Removal. The authorization de-
scribed in section 3.05(1) of this revenue
procedure must acknowledge that the cen-
tral organization may remove the subordi-
nate organization from the group exemp-
tion letter if the subordinate organization
fails to comply with the requirements of
this revenue procedure.
(3) Retention of the authorization by
the central organization. The authoriza-
tion described in section 3.05(1) of this
revenue procedure must be retained by the
central organization while the group ex-
emption letter is in effect with respect to
the authorizing subordinate organization.
.06 Employer identification numbers
(EINs). The central organization and each
subordinate organization must have its
own EIN. The central organization must
obtain its own EIN prior to filing an appli-
cation, and each subordinate organization
(or the central organization on a subordi-
nate organization’s behalf) must obtain
its own EIN prior to initial inclusion in or
subsequent addition to a group exemption
letter.
.07 Annual information return or no-
tice. A central organization and all subor-
dinate organizations initially included in
or subsequently added to a group exemp-
tion letter must comply with the annual
filing requirement described in section 7
of this revenue procedure.
SECTION 4. ISSUANCE OF GROUP
EXEMPTION LETTERS
.01 Group exemption letter requests.
The IRS will consider requests from cen-
tral organizations for group exemption
letters made in the manner required by
section 5.01 of this revenue procedure and
Rev. Proc. 2020-5 (or its successor).
.02 Non-acceptance. A group exemp-
tion letter request that is missing any item
of information required by section 5 of
this revenue procedure will not be consid-
ered substantially complete and will not
be accepted by the IRS.
.03 Circumstances under which group
exemption letters are not ordinarily is-
sued. The IRS may decline to issue a group
exemption letter where the activities de-
scribed in the group exemption letter re-
quest involve complex facts and circum-
stances that, in the interest of sound tax
administration, are more appropriate for
determination on an organization-by-or-
ganization basis.
SECTION 5. INSTRUCTIONS FOR
REQUESTING A GROUP EXEMPTION
LETTER
.01 Group exemption letter request. A
group exemption letter request must be
made in the manner described by Rev.
Proc. 2020-5 (or its successor). In addi-
tion, the group exemption letter request
must include all of the information de-
scribed in sections 5.02, 5.03, and, if ap-
plicable, 5.04 of this revenue procedure.
A subordinate organization included in a
group exemption letter should not apply
separately for recognition of exemption
(except in the circumstances described in
section 9 of this revenue procedure).
.02 Information about the central or-
ganization. The central organization must
include its name, address, and EIN; and
information establishing that it is de-
scribed in section 3.01(1)(a) of this reve-
nue procedure. A central organization that
has not obtained recognition of exemption
at the time it requests a group exemption
letter, as required by section 3.01(1)(b)
of this revenue procedure, may submit
such request concurrently with its own
application, or, in the case of a central
organization that has had its exemption
automatically revoked, its application for
reinstatement (see section 4.02(7)(a)(ii) of
Rev. Proc. 2020-5 (or its successor) and
section 3.01(1)(b) of this revenue proce-
dure).
.03 Information about the subordinate
organizations. (1) In general. The central
organization must include the following
statements, representations, and informa-
tion on behalf of its subordinate organiza-
tions:
(a) Information verifying that each
subordinate organization is affiliated with
and subject to the central organization’s
general supervision or control (see section
3.02 of this revenue procedure).
(b) A representation that the subordi-
nate organizations are all described in the
same paragraph of § 501(c) as the central
organization (see sections 3.03(2)(a)(i)
and 3.03(2)(a)(ii) of this revenue proce-
dure) or, if the central organization is ei-
ther an instrumentality or an agency of a
political subdivision and is not described
in § 501(c), the paragraph of § 501(c) in
which all subordinate organizations are or
will be described (see sections 3.03(2)(a)
(i) and 3.03(2)(a)(iii) of this revenue pro-
cedure).
(c) If the subordinate organizations are
or will be described in § 501(c)(3), the
foundation classification of all the subor-
dinate organizations (see section 3.03(2)
(b) of this revenue procedure).
(d) A representation that no subordi-
nate organization is organized in a foreign
country (see section 3.04(1) of this reve-
nue procedure).
(e) If the subordinate organizations
are or will be described in § 501(c)(3), a
representation that no subordinate organi-
zation is classified as a private foundation
under § 509(a) or a Type III supporting
organization under § 509(a)(3) (see sec-
tions 3.04(2) and 3.04(3) of this revenue
procedure).

Bulletin No. 2020–21 853 May 18, 2020
(f) A summary of the subordinate orga-
nizations’ purposes and activities, includ-
ing the sources of their receipts and the
nature of their expenditures.
(g) A representation that the primary
purpose of all the subordinate organiza-
tions described in § 501(c) (other than
§ 501(c)(3)) is described by the same
NTEE code and the NTEE code describ-
ing the subordinate organizations’ primary
purpose (see section 3.03(2)(c) of this rev-
enue procedure).
(h) A statement that each subordinate
organization has furnished written autho-
rization described in section 3.05 of this
revenue procedure to the central organiza-
tion.
(i) A statement confirming that all
subordinate organizations were orga-
nized within 27 months of the post-
mark date of the group exemption let-
ter request, or, if any such subordinate
organizations have been organized for
more than 27 months and were not pre-
viously recognized by the IRS as being
described in § 501(c) or included in a
different group exemption letter, a state-
ment that all subordinate organizations
are willing to be recognized as exempt
from the postmark date of the group ex-
emption letter request (see section 10.01
of this revenue procedure).
(j) If applicable, a statement that any
subordinate organizations on behalf of
which the central organization will file
group returns, as described in section 7.02
of this revenue procedure, are on the same
accounting period as the central organiza-
tion.
(2) Supporting information. The central
organization must provide the following
supporting information as attachments:
(a) A sample copy of the uniform gov-
erning instrument or, if the subordinate
organizations are described in § 501(c)(3)
and have different purposes, sample cop-
ies of the uniform instrument describing
each distinct purpose (see section 3.03(2)
(d) of this revenue procedure).
(b) A list of the names, mailing address-
es, EINs, and dates of formation or incor-
poration of subordinate organizations to
be included in the group exemption letter
(a current directory of subordinate orga-
nizations may be furnished in lieu of the
list if it includes the required information
and if the subordinate organizations to be
included in the group exemption letter are
identified).
(c) If applicable, a list of subordinate
organizations to be included in the group
exemption letter to which the IRS has is-
sued determination letters that are still ef-
fective (that is, have not been automatical-
ly or otherwise revoked).
(3) Additional requirements. In cer-
tain cases, the central organization must
submit information establishing that its
subordinate organizations meet additional
requirements. For example, a central or-
ganization with subordinate organizations
that are private schools, charitable hospi-
tals, or social welfare organizations must
submit the information described in this
section 5.03(3), as applicable, in addition
to the information generally required by
section 5 of this revenue procedure.
(a) Private schools. If the group ex-
emption letter request involves subor-
dinate organizations that are or will be
private schools described in § 501(c)(3),
the central organization must include the
information required by Rev. Proc. 75-
50, 1975-2 C.B. 587, as modified by Rev.
Proc. 2019-22 , 2019-22 I.R.B. 1260, and
such other information necessary to es-
tablish that the subordinate organizations
comply with the requirements of Rev. Rul.
71-447, 1971-2 C.B. 230.
(b) Charitable hospitals. If the group
exemption letter request involves subordi-
nate organizations that are or will be hos-
pital organizations or facilities described
in § 501(c)(3), the central organization
must provide the information necessary
to establish that each subordinate organi-
zation meets the requirements of § 501(r)
and Rev. Rul. 69-545, 1969-2 C.B. 117.
(c) Social welfare organizations. A
subordinate organization described in
§ 501(c)(4) that is included in or subse-
quently added to a group exemption letter
must, no later than 60 days after the date
on which the organization was formed as a
legal entity, submit a completed electronic
Form 8976 to the IRS in the manner de-
scribed in Rev. Proc. 2016-41, 2016-30
I.R.B. 165 (unless an exception applies).
A subordinate organization may autho-
rize an individual representing the central
organization to submit Form 8976 on the
subordinate organization’s behalf and to
receive any communications relating to
the subordinate organization’s submis-
sion. In its request for the group exemp-
tion letter, the central organization must
represent that each subordinate organiza-
tion described in § 501(c)(4) has submit-
ted or will submit Form 8976 (unless an
exception applies).
.04 Request for a new group exemp-
tion letter after the termination of a group
exemption letter. If the IRS terminates a
group exemption letter as described in
section 8.01(1) of this revenue procedure,
the central organization may request a
new group exemption letter in the man-
ner described in sections 5.01 through
5.03 of this revenue procedure, but also
must include a description of the policies
or procedures it intends to implement or
has implemented to ensure the continued
effectiveness of the new group exemption
letter.
SECTION 6. INFORMATION
REQUIRED TO MAINTAIN A GROUP
EXEMPTION LETTER
.01 Information required annually. The
central organization must submit the in-
formation described in section 6.02 of this
revenue procedure to the IRS annually at
least 30 days before the close of its annual
accounting period. A central organization
may provide additional updates at any
time.
.02 Supplemental group ruling in-
formation. (1) Changes in purposes or
activities. In the case of subordinate or-
ganizations described in § 501(c) (other
than § 501(c)(3)), the central organiza-
tion must submit a detailed description
of any change in the purposes of all of
its subordinate organizations (see section
3.03(2)(c) of this revenue procedure). In
the case of subordinate organizations de-
scribed in § 501(c)(3), the central organi-
zation must submit a detailed description
of any change in the purpose or purposes
of any of its subordinate organizations.
In the case of subordinate organizations
described in any paragraph of § 501(c),
the central organization must submit a
detailed description of any change in the
activities of its subordinate organizations.
(2) Lists of certain changes, removals,
or additions. (a) List categories. The cen-
tral organization must submit a separate
list for each of the following categories
(as applicable):

May 18, 2020 854 Bulletin No. 2020–21
(i) Subordinate organizations that have
changed their names or mailing addresses
during the year.
(ii) Subordinate organizations no lon-
ger to be included in the group exemption
letter (see section 8.02 of this revenue pro-
cedure).
(iii) Subordinate organizations to be
added to the group exemption letter (see
section 6.02(3) of this revenue procedure).
(b) Required information. Each list de-
scribed in section 6.02(2)(a) of this rev-
enue procedure must include the name,
mailing address, EIN, and date of forma-
tion or incorporation of the affected subor-
dinate organizations.
(c) No annotated directories. An anno-
tated directory of subordinate organiza-
tions is not acceptable for purposes of sec-
tion 6.02(2)(a) of this revenue procedure.
(3) Organizations to be added to the
group exemption letter as subordinate
organizations. The central organization
must submit the following information
with respect to any organizations being
added to the group exemption letter as
subordinate organizations, as described in
section 6.02(2)(a)(iii) of this revenue pro-
cedure:
(a) A statement that the information
upon which the group exemption letter
was based (see section 5.03 of this reve-
nue procedure) is applicable in all material
respects to the subordinate organizations
being added to the group exemption letter.
(b) With respect to subordinate organi-
zations being added to the group exemption
letter, the information required by sections
5.03(1)(h) (statement regarding written
authorization for inclusion in the group
exemption letter), 5.03(1)(j) (statement re-
garding the accounting period of subordi-
nate organizations on behalf of which the
central organization will file group returns),
5.03(2)(c) (list of subordinate organizations
with determination letters), and 5.03(3)
(any additional information as applica-
ble) of this revenue procedure (see section
10.02 of this revenue procedure regarding
effective date of exemption for a subordi-
nate organization subsequently added to a
group exemption letter).
(4) No change. If the central organiza-
tion has no changes described in section
6.02(1) or section 6.02(2) of this revenue
procedure to report, the central organiza-
tion must submit a statement to that effect.
(5) Intent to terminate the group ex-
emption letter. If a central organization in-
tends to terminate its group exemption let-
ter, the central organization must submit a
statement to that effect (see section 9.02
of this revenue procedure for the effect of
such termination on any subordinate orga-
nization). The central organization should
notify each subordinate of the termination
and provide information regarding how
the subordinate organization may apply
for or obtain recognition of its exemption
(see section 9.04 of this revenue proce-
dure).
.03 Address. The information required
by section 6.01 of this revenue procedure
must be sent to:
Ogden Service Center
Mail Stop 6271
1000 South 1200
Ogden, UT 84404-4749
.04 Additional information. Submis-
sion of the information required by this
section does not relieve the central organi-
zation or any of its subordinate organiza-
tions of the duty to submit such additional
information as the IRS may require to de-
termine whether the conditions for contin-
ued exemption are being met. See § 6001
and the regulations thereunder.
.05 Exception for central organiza-
tions that are churches or conventions or
associations of churches. A central orga-
nization described in § 501(c)(3) that is
a church or convention or association of
churches and that maintains a group ex-
emption letter, may, but is not required to,
submit the information described in sec-
tion 6.01 of this revenue procedure.
SECTION 7. ANNUAL FILING
REQUIREMENT
.01 In general. A group exemption let-
ter does not change the general require-
ment described in § 6033(a)(1) that every
organization exempt from federal income
tax under § 501(a) must file an annual in-
formation return or notice, as applicable.
Accordingly, unless a filing exception
applies, the central organization and each
subordinate organization must file an an-
nual information return or notice.
.02 Group returns. Section 1.6033-2(d)
provides that, in addition to the annual in-
formation return or notice filed on its own
behalf, a central organization may also
file a group return on Form 990 for two
or more of its subordinate organizations.
When filing the group return, the central
organization must use a special EIN (sep-
arate from the central organization’s EIN)
that is issued solely for the purpose of the
group return. A group return is consid-
ered the return of each subordinate orga-
nization included in the group return and
therefore relieves each subordinate orga-
nization included in the group return of
the requirement to file a separate annual
information return or notice described in
section 7.01 of this revenue procedure.
SECTION 8. TERMINATION OF THE
GROUP EXEMPTION LETTER
.01 Termination of the group exemption
letter with respect to all subordinate or-
ganizations. (1) Termination by the IRS.
The IRS may terminate a group exemp-
tion letter with respect to all subordinate
organizations if—
(a) The central organization notifies the
IRS that it is going out of existence;
(b) The IRS determines that the cen-
tral organization is no longer described in
§ 501(c) and therefore is not exempt under
§ 501(a);
(c) The central organization’s exemp-
tion is automatically revoked;
(d) The central organization fails to
submit a timely SGRI (see section 6 of
this revenue procedure);
(e) The central organization has no
subordinate organizations (see section
3.01(2) of this revenue procedure);
(f) The central organization fails to
exercise general supervision (see section
3.02(3) of this revenue procedure) or con-
trol (see section 3.02(4) of this revenue
procedure) over one or more subordinate
organizations;
(g) More than half of the subordinate
organizations have had their exemption
automatically revoked;
(h) More than half of the subordinate
organizations fail to meet the requirements
for initial inclusion in or subsequent addi-
tion to a group exemption letter (see sec-
tion 3.03(2) of this revenue procedure); or
(i) The central organization otherwise
fails to meet the requirements of this rev-
enue procedure.
(2) Termination by the central organi-
zation. The central organization may ter-

Bulletin No. 2020–21 855 May 18, 2020
minate its group exemption letter at any
time by providing the notice described in
section 6.02(5) of this revenue procedure.
.02 Termination of the group exemption
letter with respect to a particular subor-
dinate organization. (1) Removal from the
group exemption letter. A subordinate or-
ganization will be removed from a group
exemption letter if—
(a) The central organization notifies the
IRS that the subordinate organization will
no longer be included in the group exemp-
tion letter (see section 6.02(2)(a)(ii) of this
revenue procedure);
(b) The IRS determines that—
(i) The subordinate organization is no
longer described in § 501(c) and therefore
is not exempt under § 501(a); or
(ii) The subordinate organization is an
organization not eligible for initial inclu-
sion in or subsequent addition to a group
exemption letter because it is an organiza-
tion described in section 3.04(1) (foreign
organization), section 3.04(2) (private
foundation), section 3.04(3) (Type III sup-
porting organization), or section 3.04(4)
(QNHII) of this revenue procedure;
(c) The subordinate organization’s ex-
emption is automatically revoked (see
section 3.04(5) of this revenue procedure);
or
(d) The subordinate organization fails
to satisfy one or more of the matching,
foundation classification, or similar pur-
pose requirements (see sections 3.03(2)
(a), 3.03(2)(b), and 3.03(2)(c) of this rev-
enue procedure).
(2) Group exemption letter remains in
effect. The group exemption letter will re-
main in effect with respect to all non-af-
fected subordinate organizations after the
removal of one or more subordinate or-
ganizations under section 8.02(1) of this
revenue procedure unless the IRS has ter-
minated the group exemption letter with
respect to all subordinate organizations
under section 8.01 of this revenue proce-
dure.
SECTION 9. EFFECT OF NON-
ACCEPTANCE, NON-ISSUANCE,
TERMINATION, OR REMOVAL
.01 Effect of non-acceptance or non-is-
suance. When the IRS does not accept a
group exemption letter request (see sec-
tion 4.02 of this revenue procedure) or
declines to issue a group exemption let-
ter (see section 4.03 of this revenue pro-
cedure), the IRS will not recognize the
exemption of any organization initially
included in the group exemption letter re-
quest as a subordinate organization, unless
the IRS previously issued a determination
letter to such subordinate organization and
that determination letter is still effective
(that is, it has not been automatically or
otherwise revoked) on the date of non-ac-
ceptance or non-issuance, as applicable,
except as provided in section 9.04 of this
revenue procedure.
.02 Effect of termination. (1) In gener-
al. When the IRS or the central organiza-
tion terminates a group exemption letter
with respect to all subordinate organiza-
tions (see section 8.01 of this revenue pro-
cedure), the IRS will not thereafter recog-
nize the exempt status of any subordinate
organization included in the group exemp-
tion letter, except as provided in section
9.04 of this revenue procedure.
(2) Churches or conventions or associ-
ations of churches. Notwithstanding sec-
tion 9.02(1) of this revenue procedure, the
termination of a group exemption letter
will not affect the exempt status of subor-
dinate organizations that are churches or
conventions or associations of churches,
described in § 501(c)(3). See § 508(c).
Nonetheless, a subordinate organization
that is a church or a convention or associ-
ation of churches may obtain recognition
of its exemption from the IRS by complet-
ing one of the actions described in section
9.04(2) of this revenue procedure.
.03 Effect of removal. If the IRS or the
central organization notifies a particular
subordinate organization that it has been
removed from a group exemption letter,
the IRS will not thereafter recognize the
exempt status of the affected subordinate
organization, except as provided in sec-
tion 9.04 of this revenue procedure.
.04 Subsequent recognition of exemp-
tion. (1) In general. Notwithstanding sec-
tions 9.01, 9.02, and 9.03 of this revenue
procedure, an organization may obtain
recognition of its exempt status or may
declare its exempt status, as applicable, by
completing an action described in section
9.04(2) or 9.04(3).
(2) Organization required to file an
application. An organization required to
apply for recognition of exemption under
§ 505 or § 508 may obtain recognition of
its exemption by—
(a) Filing an application;
(b) Being added to a group exemption
letter maintained by another central orga-
nization;
(c) Being included by another central
organization in a request for a new group
exemption letter; or
(d) Being included by the same central
organization in a request for a new group
exemption letter.
(3) Organization not required to file
an application. An organization that is
not required to apply for recognition of
exemption under § 505 or § 508 may ob-
tain recognition of its exemption in the
same manner described in section 9.04(2)
of this revenue procedure. Alternatively,
such a subordinate organization may de-
clare its exempt status (without obtaining
recognition from the IRS) by filing annual
information returns or notices (see section
7 of this revenue procedure). In certain cir-
cumstances, an organization that intends
to operate as an organization described in
section 501(c)(4) may be required to file
Form 8976 (see section 5.03(3)(c) of this
revenue procedure).
(4) Automatic revocation. Notwith-
standing section 9.04(3) of this revenue
procedure, a subordinate organization
must file an application for reinstate-
ment if the subordinate organization was
removed from a group exemption letter
because its exemption was automatically
revoked (see section 8.02(1)(c) of this rev-
enue procedure). A central organization
may not add the subordinate organization
to a group exemption letter (see section
3.04(5) of this revenue procedure) unless
and until the IRS has reinstated the subor-
dinate organization’s exemption.
SECTION 10. EFFECTIVE DATE OF
EXEMPTION
.01 Initial inclusion. If all of the or-
ganizations initially included in a group
exemption letter as subordinate organiza-
tions were organized within 27 months of
the postmark date of the group exemption
letter request, then the effective date of
exemption for each organization initially
included in a group exemption letter as a
subordinate organization will be the or-
ganization’s date of formation, or, in the

May 18, 2020 856 Bulletin No. 2020–21
case of an organization that has had its ex-
emption automatically revoked and subse-
quently reinstated after filing an applica-
tion for reinstatement, the date on which
the organization’s exemption was reinstat-
ed, determined in accordance with Rev.
Proc. 2014-11. If any organization was
organized more than 27 months before the
postmark date of the group exemption let-
ter request, was not previously recognized
by the IRS as being described in § 501(c),
and was not included in another group
exemption letter, the effective date of all
the organizations initially included in the
group exemption letter as subordinate or-
ganizations will be the postmark date of
the group exemption letter request.
.02 Subsequent addition. The effective
date of exemption of an organization that
is subsequently added to a group exemp-
tion letter as a subordinate organization
depends on its exempt status immediately
prior to its addition. If, at such time, the
organization was not recognized by the
IRS as being described in § 501(c) and
was not included in another group exemp-
tion letter, the effective date of exemption
will be the postmark date of the infor-
mation required under section 6 of this
revenue procedure, regardless of the or-
ganization’s date of formation. If, at such
time, the organization was recognized by
the IRS as being described in § 501(c) or
was included in another group exemption
letter, the effective date of exemption will
be the same as prior to its addition to the
group exemption letter.
.03 Termination or removal. (1) In
general. Except as provided in section
10.03(2) or section 10.03(3) of this rev-
enue procedure, if a group exemption
letter is terminated, either with respect
to all subordinate organizations or with
respect to a particular subordinate organi-
zation, an organization required to apply
for recognition of exemption under § 505
or § 508 must file an application within
27 months of the date on which the IRS
terminated the group exemption letter to
receive an effective date that is the same
as the date of termination of the group ex-
emption letter. An organization that files
an application more than 27 months after
termination of the group exemption letter
will be recognized from the postmark date
of its application, provided that it other-
wise meets the requirement for tax-ex-
empt status. In this case, the organization
will be taxable from the date the IRS ter-
minated the group exemption letter until
the postmark date of its application. An
organization that is not required to file an
application may declare its exempt status
(without obtaining recognition from the
IRS) by continuing to file annual informa-
tion returns or notices (see section 9.04(3)
of this revenue procedure).
(2) Automatic revocation. In the case of
a subordinate organization that has had its
exemption automatically revoked, the ef-
fective date of exemption for such organi-
zation will be the date on which the orga-
nization’s exemption was reinstated after
being automatically revoked, determined
in accordance with Rev. Proc. 2014-11, as
applicable.
(3) Declaratory judgment action. In
certain circumstances, a subordinate orga-
nization may be able to file a declaratory
judgment action under § 7428, in which
case, the effective date of exemption for
such organization will be determined by
the outcome of the proceeding.
SECTION 11. DECLARATORY
JUDGMENT PROVISIONS OF § 7428
.01 In general. Section 10 of Rev. Proc.
2020-5 (or its successor) generally ex-
plains when and how a declaratory judg-
ment proceeding under § 7428 may be
filed in the United States Tax Court, the
United States Court of Federal Claims, or
the District Court of the United States for
the District of Columbia.
.02 Application to central organiza-
tions. Section 10.02 of Rev. Proc. 2020-5
(or its successor) describes when § 7428
applies to a central organization.
.03 Application to subordinate orga-
nizations. Section 7428 applies to a final
determination by the IRS that a particular
subordinate organization—
(1) Is no longer described in § 501(c)
and therefore is not exempt under § 501(a)
(see section 8.02(1)(b)(i) of this revenue
procedure); or
(2) Was not eligible for initial inclusion
in or subsequent addition to a group ex-
emption letter because it is an organiza-
tion described in section 3.04(1) (foreign
organization), section 3.04(2) (private
foundation), section 3.04(3) (Type III sup-
porting organization), or section 3.04(4)
(QNHII) of the proposed revenue proce-
dure (see section 8.02(1)(b)(ii) of this rev-
enue procedure).
.04 Actions to which § 7428 does not
apply. Section 7428 does not apply to the
following actions:
(1) Non-acceptance of a group exemp-
tion letter request (see section 4.02 of this
revenue procedure).
(2) Non-issuance of a group exemption
letter (see section 4.03 of this revenue pro-
cedure).
(3) Termination of a group exemption
letter for a reason described in section
8.01(1), other than section 8.01(1)(b)
(determination by the IRS that the cen-
tral organization is no longer described
in § 501(c), in which case § 7428 would
apply to the central organization), of this
revenue procedure.
(4) Removal of a subordinate organi-
zation from a group exemption letter as
described in section 8.02(1), other than
section 8.02(1)(b)(ii) (determination by
the IRS that an organization is not eligi-
ble for initial inclusion in or subsequent
addition to a group exemption letter as a
subordinate organization), of this revenue
procedure.
.05 Who must file. A subordinate or-
ganization must file the declaratory judg-
ment action under § 7428 on its own
behalf with respect to a determination af-
fecting its own initial or continuing qual-
ification or classification. Accordingly, a
central organization may not file a declar-
atory judgment action under § 7428 on
behalf of one or more of its subordinate
organizations. Conversely, a subordinate
organization may not file the declaratory
judgment action under § 7428 on behalf
of its central organization. For more in-
formation on the application of § 7428,
see section 10 of Rev. Proc. 2020-5 (or
its successor).
SECTION 12. RELIANCE
.01 By a central or subordinate orga-
nization. In general, a central organization
and its subordinate organizations may rely
on a group exemption letter that continues
to meet the requirements of this revenue
procedure (except as provided in section
14.02(2) of this revenue procedure, which
provides a transition period for preexist-
ing group exemption letters). However,

Bulletin No. 2020–21 857 May 18, 2020
see section 11.02 of Rev. Proc. 2020-5 (or
its successor) regarding limitations on re-
liance.
.02 By grantors and contributors. To
verify that contributions to a subordinate
organization are deductible under § 170, a
donor should consult the central organiza-
tion’s listing in Tax Exempt Organization
Search (Pub. 78 Data), which will indicate
that contributions to its subordinate orga-
nizations are also deductible. Section 3.02
of Rev. Proc. 2018-32, 2018-23 I.R.B.
739. The donor should then confirm that
the subordinate organization is covered by
the group exemption letter by contacting
the central organization. See generally
section 6.03 of Rev. Proc. 2018-32. Do-
nors may rely on the central organization’s
written verification with respect to deduct-
ibility of contributions to one or more sub-
ordinate organizations included in a group
exemption letter.
SECTION 13. DISCLOSURE OF
GROUP EXEMPTION LETTER
REQUESTS AND GROUP
EXEMPTION LETTERS
A group exemption letter, the request
for that group exemption letter, and any
supporting documents included with that
request are open to public inspection un-
der § 6104(a) and (d). See § 301.6104(a)-
1(a) & (e)(3); § 301.6104(d)-1(f)(1). See
Rev. Proc. 2020-5 (or its successor) for
rules regarding the disclosure of applica-
tions and determination letters.
SECTION 14. APPLICABILITY
.01 New group exemption letters. This
revenue procedure applies to all group
exemption letters requested and issued
after the date the final revenue procedure
is published in the Internal Revenue Bul-
letin.
.02 Preexisting group exemption let-
ters. (1) In general. Except as otherwise
provided in this section 14.02, this reve-
nue procedure applies to all preexisting
group exemption letters.
(2) Certain sections applicable to pre-
existing group exemption letters after a
transition period. (a) In general. The fol-
lowing sections of this revenue procedure
apply to preexisting group exemption let-
ters one year after the date the final reve-
nue procedure is published in the Internal
Revenue Bulletin (transition period):
(i) Section 3.01(2) of this revenue pro-
cedure (requiring a central organization to
have at least one subordinate organization
to maintain a group exemption letter).
(ii) Section 3.01(3) of this revenue pro-
cedure (permitting central organizations
to hold only one group exemption letter).
(b) Minimum number of subordinate
organizations. If a central organization
has a preexisting group exemption letter
but does not have at least one subordi-
nate organization, the central organization
must add, during the transition period,
at least one subordinate organization to
its group exemption letter (see sections
6.02(2)(a)(iii) and 6.02(3) of this revenue
procedure regarding information that must
be submitted to the IRS) or notify the IRS
of its intent to terminate the group ex-
emption letter (see section 6.02(5) of this
revenue procedure). The central organiza-
tion may submit this information with its
SGRI if its SGRI is due before the end of
the transition period.
(c) More than one group exemption let-
ter. During the transition period, a central
organization that maintains more than one
preexisting group exemption letter must
terminate all but one of its preexisting
group exemption letters. The central or-
ganization must determine which preex-
isting group exemption letter it intends to
maintain and notify the IRS of its intent to
terminate any additional preexisting group
exemption letters (see section 6.02(5) (re-
garding notification of intent to terminate)
of this revenue procedure).
(3) New subordinate organizations. (a)
In general. This revenue procedure ap-
plies to all new subordinate organizations;
no transition period is provided.
(b) Information required the first time
new subordinate organizations are added
to a preexisting group exemption letter.
In the case of a central organization with
a preexisting group exemption letter, the
information the central organization was
required to submit about its subordinate
organizations under previous revenue pro-
cedures was different than the information
required by this revenue procedure. How-
ever, this revenue procedure applies to all
new subordinate organizations of a preex-
isting group exemption letter (see section
14.02(3)(a) of this revenue procedure).
Therefore, the first time after the effective
date of this revenue procedure (see section
16 of this revenue procedure) that a central
organization adds any new subordinate or-
ganizations to a preexisting group exemp-
tion letter, such central organization must
provide the information required by sec-
tion 5.03 of this revenue procedure about
its new subordinate organizations. Upon
the second, and any subsequent, addition
of new subordinate organizations to the
preexisting group exemption letter, such
central organization must provide only the
information required by section 6.02(3) of
this revenue procedure.
(4) Preexisting subordinate organiza-
tions. (a) In general. Except as provided
in sections 14.02(4)(b) and 14.02(4)(c) of
this revenue procedure, the requirements
of this revenue procedure apply to preex-
isting subordinate organizations.
(b) Certain sections not applicable.
The following sections of this revenue
procedure do not apply to preexisting sub-
ordinate organizations:
(i) Sections 3.02(3), 3.02(4), and
3.02(5) of this revenue procedure (defin-
ing, and describing the applicability of,
the terms “general supervision” and “con-
trol”).
(ii) Sections 3.03(2)(a)(ii), 3.02(2)(b),
3.02(2)(c), and 3.03(2)(d) of this revenue
procedure (describing the matching, foun-
dation classification, similar purpose, and
uniform governing instrument require-
ments).
(iii) Section 3.04(3) of this revenue
procedure (stating that Type III support-
ing organizations are not permitted to be
subordinate organizations).
(iv) Section 3.05(2) of this revenue
procedure (requiring that the authorization
for initial inclusion in or subsequent addi-
tion to a group exemption letter described
in section 3.05(1) of this revenue proce-
dure permit the central organization to
remove the subordinate organization from
the group exemption letter if the subordi-
nate organization fails to comply with the
requirements of this revenue procedure).
(c) Requirements for preexisting subor-
dinate organizations. Preexisting subordi-
nate organizations—
(i) Must all be described in the same
paragraph of § 501(c), though not neces-
sarily the same paragraph as the central
organization;

May 18, 2020 858 Bulletin No. 2020–21
(ii) If described in § 501(c)(3), may be
classified in any paragraph of § 509 (in-
cluding § 509(a)(3));
(iii) May have different primary pur-
poses; and
(iv) May have unique (as opposed to
“uniform”) governing instruments (char-
ters, trust indentures, articles of associa-
tion, etc.).
(d) Preexisting subordinate organiza-
tions described in different paragraphs of
§ 501(c). If a preexisting group exemption
letter includes preexisting subordinate
organizations that are described in dif-
ferent paragraphs of § 501(c), the central
organization must remove the preexisting
subordinate organizations described in the
paragraph of § 501(c) different from the
paragraph in which the central organiza-
tion stated that the subordinate organiza-
tions would be described in its group ex-
emption letter request (see section 4.02(3)
of Rev. Proc. 80-27) during the transition
period. For example, if a central organi-
zation has a preexisting group exemption
letter for subordinate organizations de-
scribed in § 501(c)(3), but has subordinate
organizations described in both § 501(c)
(3) and 501(c)(4), the central organization
must remove the subordinate organiza-
tions described in § 501(c)(4) (see section
6.02(2)(a)(ii) of this revenue procedure
regarding subordinate organizations no
longer to be included in a group exemp-
tion letter).
(e) General supervision or control. The
definitions of “general supervision” and
“control” in sections 3.02(3) and 3.02(4)
of this revenue procedure do not apply
to preexisting subordinate organizations.
Nonetheless, a central organization that
meets the requirements of section 3.02(3)
or section 3.02(4) of this revenue proce-
dure with respect to a particular preexist-
ing subordinate organization per se exer-
cises “general supervision” or “control,”
as applicable, over that preexisting subor-
dinate organization.
.03 Examples. The application of this
section 14 is illustrated by the following
examples.
(1) One preexisting group exemp-
tion letter for subordinate organizations
described in a different paragraph of
§ 501(c) than the central organization. A
central organization described in § 501(c)
(3) has a single preexisting group exemp-
tion letter for subordinate organizations
described in § 501(c)(4), as was permitted
by Rev. Proc. 80-27. The central organi-
zation may continue to maintain the pre-
existing group exemption letter because
the central organization’s preexisting sub-
ordinate organizations are not required
to be described in the same paragraph of
§ 501(c) as the central organization (see
section 14.02(4)(c)(i) of this revenue pro-
cedure). However, the central organization
may not add any new subordinate organi-
zations because, in this case, the addition
of new subordinate organizations would
violate the matching requirements. In par-
ticular, if the central organization added
new subordinate organizations described
in § 501(c)(3), the central organization
would satisfy the requirement that new
subordinate organizations be described
in the same paragraph of § 501(c) as the
central organization (see sections 3.03(2)
(a)(ii) and 14.02(3)(a) of this revenue pro-
cedure) but would violate the requirement
that all subordinate organizations be de-
scribed in the same paragraph of § 501(c)
(see sections 3.03(2)(a)(i) and 14.02(3)
(a), of this revenue procedure) because
the central organization would have sub-
ordinate organizations described both
section § 501(c)(3) and (4). If the central
organization added new subordinate or-
ganizations described in § 501(c)(4), the
central organization would satisfy the re-
quirement that all subordinate organiza-
tions be described in the same paragraph
of § 501(c) (see sections 3.03(2)(a)(i) and
14.02(3)(a) of this revenue procedure) but
would violate the requirement that all new
subordinate organizations be described
in the same paragraph of § 501(c) as the
central organization (see sections 3.03(2)
(a)(ii) and 14.02(3)(a) of this revenue pro-
cedure).
(2) One preexisting group exemption
letter for subordinate organizations de-
scribed in the same paragraph of § 501(c)
as the central organization. A central or-
ganization described in § 501(c)(3) has a
single preexisting group exemption letter
for subordinate organizations described
in § 501(c)(3). The preexisting subor-
dinate organizations (none are private
foundations) all have different founda-
tion classifications under § 509(a), which
was not prohibited by Rev. Proc. 80-27.
The central organization may add new
subordinate organizations that are de-
scribed in § 501(c)(3) to its preexisting
group exemption letter because it satisfies
the matching requirements – all of the
subordinate organizations are described
in the same paragraph of § 501(c) (see
sections 3.03(2)(a)(i) and 14.02(3)(a) of
this revenue procedure) and the central
organization and all of its new subordi-
nate organizations are described in the
same paragraph of § 501(c) (see sections
3.03(2)(a)(ii) and 14.02(3)(a) of this reve-
nue procedure). Nonetheless, if the central
organization adds new subordinate organi-
zations described in § 501(c)(3) to the pre-
existing group exemption letter, the new
subordinate organizations must have the
same foundation classification, although
not necessarily the same foundation clas-
sification as the central organization (see
sections 3.03(2)(b) and 14.02(3)(a) of this
revenue procedure).
(3) Two preexisting group exemption
letters for subordinate organizations
described in different paragraphs of
§ 501(c). A central organization described
in § 501(c)(3) has two preexisting group
exemption letters – one for subordinate
organizations described in § 501(c)(3)
and one for subordinate organizations
described in § 501(c)(4) – which was not
prohibited by Rev. Proc. 80-27. The cen-
tral organization may only keep one pre-
existing group exemption letter because
this revenue procedure does not permit
a central organization to maintain more
than one group exemption letter (see sec-
tions 3.01(3) and 14.02(1) of this revenue
procedure). However, this requirement
does not apply until after the transition
period (see section 14.02(2)(a)(ii) of this
revenue procedure). During the transition
period, the central organization must de-
termine which preexisting group exemp-
tion letter it intends to keep and notify the
IRS regarding which preexisting group
exemption letter it intends to terminate
(see section 14.02(2)(c) of this revenue
procedure). Like Example 1, if the cen-
tral organization chooses to maintain the
group exemption letter for subordinate or-
ganizations described in § 501(c)(4), the
central organization may not add any new
subordinate organizations. Like Example
2, if the central organization chooses to
maintain the group exemption letter for
subordinate organizations described in

Bulletin No. 2020–21 859 May 18, 2020
§ 501(c)(3), the central organization may
add new subordinate organizations but the
new subordinate organizations must have
the same foundation classification as each
other, although not necessarily the same
as the central organization. Either way, a
subordinate organization that is removed
from the group exemption letter may
maintain its exempt status by taking an
action in section 9.04(2) or section 9.04(3)
of this revenue procedure (see section
9.02 of this revenue procedure regarding
the effect of termination).
(4) Central organization that is not de-
scribed in § 501(c) with two preexisting
group exemption letters for subordinate
organizations described in different para-
graphs of § 501(c). Assume the same facts
as Example 3 except that the central or-
ganization is an agency of a political sub-
division and is not described in § 501(c).
Like Example 3, the central organization
may only keep one group exemption letter
(see sections 3.01(3) and 14.02(1) of this
revenue procedure). However, unlike Ex-
ample 3, the central organization may add
new subordinate organizations to which-
ever preexisting group exemption letter it
chooses to maintain because the matching
requirement described in section 3.03(2)
(a)(ii) of this revenue procedure does not
apply to a central organization that is an
instrumentality or an agency of a political
subdivision and that is not described in
§ 501(c) (see section 3.03(2)(a)(iii) of this
revenue procedure).
(5) One preexisting group exemption
letter with no subordinate organizations. A
central organization described in § 501(c)
(3) has a single preexisting group exemp-
tion letter for subordinate organizations
described in § 501(c)(3) but currently does
not have any subordinate organizations.
Under this revenue procedure, a central
organization must have at least one sub-
ordinate organization to maintain a group
exemption letter (see section 3.01(2) of
this revenue procedure). However, this
requirement does not apply to preexisting
group exemption letters during the transi-
tion period (see section 14.02(2)(a)(i) of
this section). During the transition period,
the central organization either must add
at least one subordinate organization de-
scribed in § 501(c)(3) to the preexisting
group exemption letter or must notify the
IRS of its intent to terminate the preexist-
ing group exemption letter (see section
14.02(2)(c) of this revenue procedure). If
the central organization adds a subordi-
nate organization to the preexisting group
exemption letter, the central organization
must submit the information described in
section 14.02(3)(b) of this revenue proce-
dure. Even though the group exemption
letter is a preexisting group exemption
letter, after the transition period, this rev-
enue procedure will apply to the preexist-
ing group exemption letter as if it is a new
group exemption letter described in sec-
tion 14.01 of this section because there are
no preexisting subordinate organizations.
(6) One preexisting group exemp-
tion letter with subordinate organiza-
tions described in different paragraphs
of § 501(c). A central organization de-
scribed in § 501(c)(3) has a preexisting
group exemption letter with subordinates
described in § 501(c)(3) and (4). Nei-
ther Rev. Proc. 80-27 nor this revenue
procedure permit a central organization
to maintain a group exemption letter for
subordinate organizations described in
different paragraphs of § 501(c). Assum-
ing that the group exemption letter was
intended for subordinate organizations
described in § 501(c)(3), the central or-
ganization must remove the subordinate
organizations described in § 501(c)(4)
by submitting the information required
by section 6.02(2)(a)(ii) of this revenue
procedure. A subordinate organization
described in § 501(c)(4) that is removed
from the group exemption letter either
may obtain recognition of or declare its
exempt status by taking an action in sec-
tion 9.04(3) of this revenue procedure
(see section 9.02 of this revenue proce-
dure regarding the effect of termination).
SECTION 15. EFFECT ON OTHER
REVENUE PROCEDURES
Rev. Proc. 80-27 (as modified by Rev.
Proc. 96-40) is modified and superseded.
SECTION 16. EFFECTIVE DATE
This revenue procedure is effective on
and after the date the final revenue proce-
dure is published in the Internal Revenue
Bulletin.
26 CFR 601.201: Rulings and determination letters
Rev. Proc. 2020-29
SECTION 1. PURPOSE
This revenue procedure modifies
the procedures in Rev. Proc. 2020-1,
2020-1 I.R.B. 1 (Jan. 2, 2020), tempo-
rarily to allow for the electronic submis-
sion of requests for letter rulings, closing
agreements, determination letters, and in-
formation letters under the jurisdiction of
the Internal Revenue Service (IRS) Office
of Chief Counsel, and for determination
letters issued by the IRS Large Business
and International Division (LB&I). Un-
til this revenue procedure is modified or
superseded, both paper and electronic re-
quests for advice described in section 2.01
of this revenue procedure provided by As-
sociate Chief Counsel Offices and LB&I,
as defined in section 2.02 of this revenue
procedure, will be accepted.
SECTION 2. BACKGROUND
.01 Revenue Procedure 2020-1 pro-
vides detailed information on how tax-
payers can request advice from the IRS
in the form of letter rulings (including
non-automatic requests for changes in
methods of accounting and non-auto-
matic requests for changes in accounting
periods), closing agreements, determina-
tion letters, and information letters (to-
gether, requests for advice). Rev. Proc.
2020-1 generally requires taxpayers to
submit paper copies of written materials
with wet signatures.
.02 For purposes of this revenue pro-
cedure, the term “Associate Chief Coun-
sel Offices and LB&I” collectively refers
to the following Associate Chief Counsel
offices and LB&I: the Associate Chief
Counsel (Corporate), the Associate Chief
Counsel (Financial Institutions and Prod-
ucts), the Associate Chief Counsel (In-
come Tax and Accounting), the Associate
Chief Counsel (International), the Associ-
ate Chief Counsel (Passthroughs and Spe-
cial Industries), the Associate Chief Coun-
sel (Procedure and Administration), and
the Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and Em-
ployment Taxes).

May 18, 2020 860 Bulletin No. 2020–21
SECTION 3. OPTIONS FOR
SUBMISSION OF REQUESTS FOR
ADVICE
.01 Scope. This revenue procedure
modifies Rev. Proc. 2020-1 to permit the
electronic submission of requests for ad-
vice from the Associate Chief Counsel Of-
fices and LB&I. This revenue procedure
does not modify procedures for determi-
nation letters issued by the IRS’s Small
Business/Self Employed Division, Wage
and Investment Division, or Tax Exempt
and Government Entities Division. Those
procedures are outlined in sections 7 and
12 of Rev. Proc. 2020-1, in Rev. Proc.
2020-4, 2020-1 I.R.B. 148 (Jan. 2, 2020),
and in Rev. Proc. 2020-5, 2020-1 I.R.B.
241 (Jan. 2, 2020).
.02 Option for electronic submission.
The IRS will accept electronic submis-
sions for requests for advice made for
matters under the jurisdiction of Associate
Chief Counsel Offices and LB&I if the
submissions are —
(1) Transmitted by facsimile or com-
pressed and encrypted email attachments
using the electronic submission proce-
dures described in section 4 of this reve-
nue procedure,
(2) Signed using the electronic signa-
ture procedures described in section 5 of
this revenue procedure.
.03 Option for paper submission. The
IRS will also continue to accept requests
for advice as provided in Rev. Proc. 2020-
1, although the IRS expects to have limit-
ed personnel available, which will likely
delay for some period of time the pro-
cessing of requests that are submitted in
paper copies through the mail and private
delivery services. Electronic submission
in accordance with this revenue procedure
will allow for more expeditious process-
ing than paper submission.
SECTION 4. ELECTRONIC
SUBMISSION PROCEDURES
.01 Submission by electronic facsim-
ile. Taxpayers and their representatives
are encouraged to use a secure electronic
facsimile service for transmitting requests
for advice. The secure electronic fac-
simile line for submitting requests under
the jurisdiction of any of the Associate
Chief Counsel Offices is (877) 773-4950.
The secure electronic facsimile line for
submitting determination letter requests
under the jurisdiction of LB&I is (844)
249-6231. To use the secure electron-
ic facsimile method, first submit the full
user fee payment set forth in Appendix A
of Rev. Proc. 2020-1 through www.pay.
gov. The request package must include a
copy of the receipt that is generated on
the last page of www.pay.gov with the
completed form, a cover sheet, and the
materials specified in Rev. Proc. 2020-1,
as modified by this revenue procedure.
Provide clear titles for the documents and
distinguish files containing administrative
forms and receipts from files that contain
the request itself and from supplemen-
tal materials. Transmit the full package,
along with a cover sheet, to the IRS at
the number indicated above for the office
with jurisdiction over the request. If the
submission is over 10 MB or over 50 pag-
es, break it into smaller components and
number the components sequentially with
the total number, such as 1 of 4, 2 of 4, 3
of 4, and 4 of 4.
.02 Submission by compressed and
encrypted email attachments. There are
more risks associated with compressed
and encrypted email attachments than
with electronic facsimile, such as the pos-
sibility that sensitive taxpayer informa-
tion could be intercepted. Accordingly,
the IRS encourages taxpayers and their
representatives to use a secure electronic
facsimile service for transmitting requests
for advice. As an alternative, this section
4.02 provides procedures for using com-
pressed and encrypted email attachments
for transmitting a request for advice un-
der the jurisdiction of any of the Associ-
ate Chief Counsel Offices and LB&I. The
compression and encryption utility used
must be compatible with SecureZIP and
allow the password-enabled encryption
of email attachments and other files. Both
the sender and recipient must have the de-
compression/ decryption utility installed.
To compress and encrypt email attach-
ments, follow the directions provided by
the program. Because these programs do
not encrypt the subject line, the body of
the email, or the file name of the attach-
ment, all taxpayer information, including
the name of the taxpayer, and return in-
formation should be included only in the
encrypted attachment.
(1) Compression utilities will request
that the sender/ taxpayer create a password
for the recipient/ IRS to use to decrypt the
attachments. The password should never
be sent in the same email with the encrypt-
ed attachment. Instead, it should be pro-
vided to the IRS in a separate email with a
subject line that makes it easy to connect
the password to the encrypted email.
(2) The package for a request transmit-
ted through email must include electronic
images of the Acknowledgement of Risks
of Email (see Attachment A to this reve-
nue procedure) signed by the taxpayer or
officer of the taxpayer (note this requires
the signature of the taxpayer, not the rep-
resentative), the receipt that is generated
on the last page of www.pay.gov, and all
materials specified in Rev. Proc. 2020-1,
as modified by this revenue procedure.
Provide clear titles for the documents and
distinguish files containing administrative
forms and receipts from files containing
the request itself and from supplemental
materials. Enable the compression and en-
cryption utility on the email system before
generating the email. If a submission is
over 5 MB, break it into smaller compo-
nents that do not exceed 5 MB each, and
number the components sequentially with
the total number, such as 1 of 4, 2 of 4,
3 of 4, and 4 of 4. The email address for
requests that fall under the jurisdiction of
any of the Associate Chief Counsel offic-
es is: Userfee@irscounsel.treas.gov. The
email address for determination letter re-
quests that fall under the jurisdiction of
LB&I is: lbi.irt.info@irs.gov.
.03 Submission of copies and originals.
Taxpayers and their representatives do not
need to submit multiple copies of docu-
ments when submitting them electroni-
cally. Where Rev. Proc. 2020-1 requires
original forms or documents, submissions
made under the provisions of this revenue
procedure will be sufficient.
.04 Submission of additional informa-
tion and signed consent agreements. Any
additional information required for a rul-
ing and signed consent agreements may
be submitted under the procedures set
forth in this revenue procedure, but should
be directed to the secure facsimile number
or email address provided by the office as-
signed to the request.
.05 Electronic submission after paper
submission. Taxpayers who filed a paper re-

Bulletin No. 2020–21 861 May 18, 2020
quest and who have not received confirma-
tion that it has been received and processed
may wish to make an electronic submission
to ensure faster processing. If a duplicate
request is submitted electronically, please
indicate on the request that it is a duplicate
submission of a paper submission.
SECTION 5. ELECTRONIC
SIGNATURE PROCEDURES
.01 This revenue procedure modifies
Rev. Proc. 2020-01 to allow electronic
signatures to be submitted when wet sig-
natures previously were required. This
modification applies to both paper and
electronic submissions.
.02 The IRS will accept the following
images of signatures (scanned or photo-
graphed) in one of the following formats:
tiff, jpg, jpeg, pdf, Microsoft Office suite,
or Zip.
.03 The IRS will accept digital signa-
tures that use encryption techniques to
provide proof of original and unmodified
documentation in one of the following
formats: tiff, jpg, jpeg, pdf, Microsoft Of-
fice suite, or Zip.
SECTION 6. CONFERENCES AND
ISSUANCE OF ADVICE
.01 Conferences. Conferences will be
conducted by telephone in the manner
provided in and subject to the require-
ments of Rev. Proc. 2020-1.
.02 Issuance of advice. The IRS has the
discretion to determine the form in which
it will issue advice to the taxpayer, includ-
ing transmittal by facsimile or email. The
IRS generally will follow established pro-
cedures for sending email if compressed
and encrypted emails attachments will be
used to correspond with the taxpayer.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2020-1 is modified.
SECTION 8. EFFECTIVE DATE
This revenue procedure is effective
April 30, 2020, until modified or super-
seded.
SECTION 9. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Teresa Dondlinger Trissell
of the Office of Associate Chief Counsel
(Procedure & Administration). For further
information regarding this revenue pro-
cedure, contact Ms. Trissell at (202) 317-
3400 (not a toll-free number).

May 18, 2020 862 Bulletin No. 2020–21
Attachment A
Acknowledgement of Risk with Email
I acknowledge that there are risks associated with email, such as the possibility that sensitive taxpayer information could be inter-
cepted and viewed by unauthorized persons. I understand the importance of securing email using appropriate encryption, particularly
when transmitting sensitive or confidential tax-related information. I understand that SecureZIP and compatible utilities only encrypt
the email attachment and not the subject line or the body of the email itself, and that confidential information should not be included
in the subject line, the body of the email itself, or the file name of the attachment. By signing this agreement, I understand that sensi-
tive or confidential information should be sent only by compressed and encrypted email attachments in communicating with the IRS.
Even with encryption it is possible electronic communications could be intercepted. I acknowledge that the United States Govern-
ment does not guarantee the security of data transmitted electronically by email and accepts no liability, regardless of fault, for any
loss or damage sustained without negligence of United States Government employees.
(Name of Taxpayer)
(Title of Individual Signing Acknowledgment)
*SIGNATURE: _______________________________
DATE: _______________________________
*Signature must be from any person who could sign the return of the taxpayer, not a representative. If the taxpayer is a corporation, the signature must be from an
officer of the corporation.

Bulletin No. 2020–21 i May 18, 2020
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previous-
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

May 18, 2020 ii Bulletin No. 2020–21
Numerical Finding List
1
Bulletin 2020–21
AOD:
2020-1, 2020-12 I.R.B. 521
2020-2, 2020-14 I.R.B. 558
2020-3, 2020-17 I.R.B. 663
Announcements:
2020-1, 2020-5 I.R.B. 552
2020-2, 2020-15 I.R.B. 609
2020-3, 2020-15 I.R.B. 655
2020-4, 2020-17 I.R.B. 667
2020-5, 2020-19 I.R.B. 796
Notices:
2020-1, 2020-2 I.R.B. 290
2020-2, 2020-3 I.R.B. 327
2020-3, 2020-3 I.R.B. 330
2020-4, 2020-4 I.R.B. 380
2020-5, 2020-4 I.R.B. 380
2020-6, 2020-7 I.R.B. 411
2020-7, 2020-7 I.R.B. 411
2020-8, 2020-7 I.R.B. 415
2020-9, 2020-7 I.R.B. 417
2020-10, 2020-10 I.R.B. 456
2020-11, 2020-11 I.R.B. 492
2020-12, 2020-11 I.R.B. 495
2020-13, 2020-11 I.R.B. 502
2020-14, 2020-13 I.R.B. 555
2020-15, 2020-14 I.R.B. 559
2020-16, 2020-14 I.R.B. 559
2020-17, 2020-15 I.R.B. 590
2020-18, 2020-15 I.R.B. 590
2020-19, 2020-15 I.R.B. 591
2020-20, 2020-16 I.R.B. 660
2020-21, 2020-16 I.R.B. 660
2020-22, 2020-17 I.R.B. 664
2020-23, 2020-18 I.R.B. 742
2020-26, 2020-18 I.R.B. 744
2020-27, 2020-19 I.R.B. 778
2020-28, 2020-19 I.R.B. 781
2020-30, 2020-19 I.R.B. 781
2020-31, 2020-19 I.R.B. 783
2020-32, 2020-21 I.R.B. 837
2020-34, 2020-21 I.R.B. 838
2020-36, 2020-21 I.R.B. 840
Proposed Regulations:
REG-107431-19, 2020-3 I.R.B. 332
REG-122180-18, 2020-3 I.R.B. 342
REG-100956-19, 2020-4 I.R.B. 383
REG-125710-18, 2020-5 I.R.B. 554
REG-132741-17, 2020-10 I.R.B. 458
REG-100814-19, 2020-12 I.R.B. 542
REG-132529-17, 2020-12 I.R.B. 667
REG-106013-19, 2020-18 I.R.B. 757
REG-117138-17, 2020-19 I.R.B. 796
REG-106864-18, 2020-20 I.R.B. 805
Revenue Procedures:
2020-1, 2020-01 I.R.B. 1
2020-2, 2020-01 I.R.B. 107
2020-3, 2020-01 I.R.B. 131
2020-4, 2020-01 I.R.B. 148
2020-5, 2020-01 I.R.B. 241
2020-7, 2020-01 I.R.B. 281
2020-9, 2020-02 I.R.B. 294
2020-10, 2020-02 I.R.B. 295
2020-11, 2020-06 I.R.B. 406
2020-8, 2020-08 I.R.B. 447
2020-12, 2020-11 I.R.B. 511
2020-13, 2020-11 I.R.B. 515
2020-17, 2020-12 I.R.B. 539
2020-18, 2020-15 I.R.B. 592
2020-14, 2020-16 I.R.B. 661
2020-22, 2020-18 I.R.B. 745
2020-23, 2020-18 I.R.B. 749
2020-24, 2020-18 I.R.B. 750
2020-26, 2020-18 I.R.B. 753
2020-25, 2020-19 I.R.B. 785
2020-28, 2020-19 I.R.B. 792
2020-20, 2020-20 I.R.B. 801
2020-27, 2020-20 I.R.B. 803
2020-29, 2020-21 I.R.B. 859
Revenue Rulings:
2020-1, 2020-3 I.R.B. 296
2020-2, 2020-3 I.R.B. 298
2020-3, 2020-3 I.R.B. 409
2020-4, 2020-4 I.R.B. 444
2020-5, 2020-5 I.R.B. 454
2020-6, 2020-11 I.R.B. 490
2020-7, 2020-12 I.R.B. 522
2020-9, 2020-15 I.R.B. 563
2020-10, 2020-15 I.R.B. 565
2020-8, 2020-19 I.R.B. 775
2020-11, 2020-19 I.R.B. 776
Treasury Decisions:
9886, 2020-2 I.R.B. 285
9887, 2020-3 I.R.B. 302
9888, 2020-3 I.R.B. 306
9891, 2020-8 I.R.B. 419
9892, 2020-8 I.R.B. 439
9893, 2020-9 I.R.B. 449
9895, 2020-15 I.R.B. 565
9896, 2020-18 I.R.B. 681
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.

Bulletin No. 2020–21 iii May 18, 2020
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2020–21
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.

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