Internal Revenue Bulletin 2026-4 (PDF rendition): IRS Announcements

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Bulletin No. 2026–4
January 20, 2026
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.
EXCISE TAX
Announcement 2026-1, page 402.
Announcement 2026-1 provides important information
for interested taxpayers and potential claimants regarding
claims under § 6435 of the Internal Revenue Code for tax
paid on dyed fuel.
EXEMPT ORGANIZATIONS
Notice 2026-8, page 368.
This notice discusses the comments received in response to
the proposed revenue procedure regarding the group exemp-
tion letter program set forth in Notice 2020-36, 2020-21
I.R.B. 840, along with the modifications made in response to
those comments and other significant revisions made to the
proposed revenue procedure.
Rev. Proc. 2026-8, page 380.
This revenue procedure modifies and supersedes 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 to
obtain recognition of exemption from federal income tax
on a group basis for organizations described in § 501(c) of
the Internal Revenue Code that are affiliated with and under
the general supervision or control of a central organization.
The revenue procedure relieves each subordinate organiza-
tion included in a group exemption letter from filing its own
application for recognition of exemption. It also sets forth
updated procedures a central organization must follow to
maintain a group exemption letter.
INCOME TAX
Notice 2026-1, page 365.
This notice provides interim guidance, pending the issuance
of forthcoming proposed regulations, relating to the credit
for carbon oxide sequestration under section 45Q (§ 45Q
credit) of the Internal Revenue Code to reflect the Environ-
mental Protection Agency’s (EPA) proposed regulations to
amend the Greenhouse Gas Reporting Program to remove
reporting obligations imposed under subpart RR of 40 CFR
part 98 (subpart RR). See 90 FR 44591 (Sept. 16, 2025).
Specifically, this notice provides a safe harbor for determin-
ing eligibility for the § 45Q credit for qualified carbon oxide
that is captured and disposed of in secure geological stor-
age (and carbon oxide described in § 1.45Q-2(h)(5)) and not
used as a tertiary injectant in a qualified enhanced oil or nat-
ural gas recovery project during calendar year 2025 in the
event the EPA does not launch the electronic Greenhouse
Gas Reporting Tool for filers to prepare and submit informa-
tion required under subpart RR for reporting year 2025 by
June 10, 2026.
Notice 2026-10, page 378.
This notice provides the optional 2026 standard mileage
rates for taxpayers to use in computing the deductible costs
of operating an automobile for business, charitable, medical,
or moving expense purposes. This notice also provides the
amount taxpayers must use in calculating reductions to basis
for depreciation taken under the business standard mileage
rate, and the maximum standard automobile cost that may
be used in computing the allowance under a fixed and vari-
able rate plan. Additionally, this notice provides the maximum
fair market value of employer-provided automobiles first
made available to employees for personal use in calendar
year 2026 for which employers may use the fleet-average
valuation rule in § 1.61-21(d)(5)(v) or the vehicle cents-per-
mile valuation rule in § 1.61-21(e).
Rev. Proc. 2026-9, page 393.
This revenue procedure publishes the amounts of unused
housing credit carryovers allocated to qualified states under
§ 42(h)(3)(D) of the Internal Revenue Code for calendar year
2025.
Finding Lists begin on page ii.

Rev. Proc. 2026-10, page 394.
This is a revenue procedure that provides additional guid-
ance on the process for requesting PLRs from the IRS, as
generally set forth in Rev. Proc. 2025-1, for consent to make
retroactive qualified electing fund (QEF) elections under sec-
tion 1295(b) of the Internal Revenue Code and Treas. Reg. §
1.1295-3(f).
T.D. 10041, page 360.
This document contains final regulations regarding the base
erosion and anti-abuse tax imposed on certain large corpo-
rate taxpayers with respect to certain payments made to
foreign related parties. The final regulations relate to how
qualified derivative payments with respect to securities lend-
ing transactions are determined and reported. The final reg-
ulations affect corporations with substantial gross receipts
that make payments to foreign related parties.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
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Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial 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.
January 20, 2026 Bulletin No. 2026–4

Part I
26 CFR 1.59A-3 and 26 CFR 1.59A-6
TD 10041
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 1
Base Erosion and Anti-
Abuse Tax Rules for
Qualified Derivative
Payments on Securities
Lending Transactions
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final rule.
SUMMARY: This document contains
final regulations regarding the base ero-
sion and anti-abuse tax imposed on certain
large corporate taxpayers with respect to
certain payments made to foreign related
parties. The final regulations relate to how
qualified derivative payments with respect
to securities lending transactions are
determined and reported. The final regu-
lations affect corporations with substantial
gross receipts that make payments to for-
eign related parties.
DATES: Effective date: The final regu-
lations are effective December 17, 2025.
Applicability dates: For dates of applica-
bility, see §§ 1.59A-10 and 1.6038A-2(g).
FOR FURTHER INFORMATION
CONTACT: Sheila Ramaswamy at (202)
317-6938 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Authority
This document contains additions and
amendments to 26 CFR part 1 (Income
Tax Regulations) under sections 59A
and 6038A of the Internal Revenue Code
(Code) (“the final regulations”). The addi-
tions and amendments are issued pursuant
to the express delegations of authority to
the Secretary of the Treasury (or his dele-
gate) provided under sections 59A(i) and
6038A(b)(2). The final regulations are
also issued under the express delegation
of authority under section 7805(a) of the
Code.
Background
This document contains final regula-
tions under sections 59A and 6038A. The
base erosion and anti-abuse tax (“BEAT”)
of section 59A imposes on each applicable
taxpayer a tax equal to the base erosion
minimum tax amount for the taxable year,
which is the excess of a specified percent-
age of the modified taxable income of the
applicable taxpayer minus the applicable
taxpayer’s regular tax liability under sec-
tion 26(b) of the Code reduced (but not
below zero) by certain credits. See section
59A(b)(1) and (2).
The applicable taxpayer determines
its modified taxable income by comput-
ing its taxable income without regard to
any base erosion tax benefit with respect
to any base erosion payment or the base
erosion percentage of any net operating
loss deduction allowed under section 172
of the Code for the taxable year. See sec-
tion 59A(c)(1). Generally, a base erosion
payment is any deductible amount paid
or accrued by an applicable taxpayer to
a foreign person (as defined in section
6038A(c)(3)) that is a related party of the
applicable taxpayer and the base erosion
tax benefit is the deduction allowed under
Chapter 1 of the Code for the taxable year
for the base erosion payment. See section
59A(d)(1), (c)(2) and (f). Qualified deriv-
ative payments (“QDPs”), as defined in
section 59A(h)(2)(A), are not treated as
base erosion payments if they are properly
reported to the IRS. See section 59A(h)(1)
and (h)(2)(B).
On January 10, 2025, the Treasury
Department and the IRS published pro-
posed regulations under sections 59A and
6038A (REG-107895-24) in the Federal
Register (90 FR 3085). The proposed
regulations would address how taxpayers
determine and report qualified derivative
payment amounts with respect to securi-
ties lending transactions. Two comments
were submitted in response to the pro-
posed regulations, but only one of those
comments addressed the proposed regu-
lations. The Summary of Comments and
Explanation of Revisions section of this
preamble discusses this comment. All
written comments received in response
to the proposed regulations are available
at https://www.regulations.gov or upon
request. A public hearing on the proposed
regulations was not held because there
were no requests to speak.
Summary of Comments and
Explanation of Revisions
Proposed § 1.59A-6(b)(3)(iii)(A)
would provide that mark-to-market gains
and losses from the securities leg of an
intercompany securities lending trans-
action are not treated as QDPs. As pro-
posed, taxpayers would not be required
to include those amounts in their QDP
reporting. A conforming amendment in
proposed § 1.59A-3(b)(2)(iv) would pro-
vide that mark-to-market gains and losses
from the securities leg of a securities lend-
ing transaction are not taken into account
when determining the amount of a taxpay-
er’s base erosion payment.
Proposed § 1.59A-6(b)(3)(iv) would
provide rules for determining whether a
taxpayer made a substitute payment or
other payment pursuant to a securities lend-
ing transaction to a foreign related party.
Specifically, the rule would provide that a
taxpayer may determine the amount of a
substitute payment or other payment that it
has paid to a foreign related party by using
the amount actually paid by the taxpayer to
the foreign related party if the taxpayer can
specifically identify each recipient of the
substitute payment or other payment. If the
taxpayer cannot determine the recipient of
those payments, the rule would provide a
method that treats the substitute payments
or other payments that a taxpayer pays with
respect to borrowed securities as having
been paid first to foreign related parties
(but not in excess of the total amount of the
payments received by the foreign related
parties from all payors).
The comment recommended that the
final regulations provide definitions for
January 20, 2026 360 Bulletin No. 2026–4

terms used in the regulations such as
“qualified derivative payment,” “substi-
tute payment,” “other amounts that relate
to the securities lending transaction,”
“mark-to-market gains and losses,” “secu-
rities leg of a securities lending transac-
tion,” and “cash collateral” to reduce
ambiguity. The comment asserted that the
ambiguity could potentially lead to sub-
stitute payments being misclassified as
QDPs rather than base erosion payments.
The comment also requested additional
examples illustrating the classification of
substitute payments.
In response to this comment, the final
regulations include cross-references to
§§ 1.861-2(a)(7) and 1.861-3(a)(6) to
clarify the meaning of the term “substitute
payment.”
Although proposed § 1.59A-3(b)(2)
(iv)(B) indicates by exclusion that “other
amounts that relate to the securities lend-
ing transaction” refers to payments relat-
ing to the transaction other than mark-to-
market gains or losses and the delivery of
securities to or receipt of securities from
the lender, greater clarity that substitute
payments and borrow fees are included
in this term may be helpful. Therefore,
for consistency purposes, §§ 1.59A-3(b)
(2)(iv)(B) and 1.59A-6(b)(3)(iii) of the
final regulations have been modified to
use the term “items of income, gain, loss,
or deduction during the taxable year” and
explain that this term refers to amounts
such as substitute payments and borrow
fees that relate to the securities lending
transaction and does not include the deliv-
ery or receipt of securities. The final reg-
ulations also clarify that the term “mark-
to-market gains and losses” with respect
to a securities lending transaction refers
to the recognition of gain or loss on the
transaction as if the taxpayer’s position in
the securities lending position were sold
for its fair market value on the last busi-
ness day of the taxable year, as described
in § 1.59A-6(b)(1)(i).
Proposed § 1.59A-6(b)(3)(iii) would
provide cross-references to §§ 1.861-2(a)
(7) and 1.861-3(a)(6) for the definition of a
“securities lending transaction.” Sections
1.861-2(a)(7) and 1.861-3(a)(6) define
the term “securities lending transaction”
as “a transfer of one or more securities
that is described in section 1058(a) or a
substantially similar transaction.” These
cross-references were intended to indicate
that “securities leg of a securities lending
transaction” refers to the components of
the transaction that relate to the transfer of
a security. The final regulations have been
modified to clarify that the securities leg
of a securities lending transaction refers
to the rights, obligations, and transfers of
securities and payments under the transac-
tion other than the obligation to provide or
right to receive cash collateral and interest
(sometimes referred to as rebate) thereon.
Some of the terms cited by the comment
are already defined in other parts of the
regulations or are commonly understood
industry terms. For example, the term
“qualified derivative payment” is defined
in section 59A(h)(2)(A) and § 1.59A-
6(b); therefore, no additional definition is
required. Additionally, “cash collateral”
is a commonly understood industry term
that does not require a definition and is
already used in the existing regulations at
§ 1.59A-6(d)(2)(iii)(B).
The final regulations do not adopt the
comment to include examples illustrating
the classification of substitute payments.
The Treasury Department and IRS are of
the view that additional examples would
not add clarity because the final regu-
lations now cross-reference regulations
illustrating the meaning of a substitute
payment, and the examples in proposed
§ 1.59A-6(b)(3)(iii)(B) clearly indicate
the types of payments that are referenced
by the term “substitute payment.”
The final regulations also make clari-
fying edits to the specific identification
method in proposed § 1.59A-6(b)(3)(iv)
(B). As noted previously, the proposed
regulations would have provided that a
taxpayer may determine the amount of
substitute payments or other payments
with respect to the securities leg of a secu-
rities lending transaction that it has paid
to a foreign related party by using the
amount actually paid by the taxpayer to
the foreign related party if the taxpayer can
specifically identify each recipient of the
substitute payment or other payment. This
proposed rule was intended to be avail-
able to a taxpayer only if the taxpayer is
able to identify all of the recipients of the
substitute payments and other payments
that taxpayer made with respect to the
securities leg of a securities lending trans-
action during the taxable year. The final
regulations clarify this rule and expand
the situations when a taxpayer may use
the specific identification method. Spe-
cifically, a taxpayer may use the specific
identification method of § 1.59A-6(b)(3)
(iv)(B) to determine the amount of the
substitute payments or other payments
with respect to the securities leg of a secu-
rities lending transaction that it has paid
to foreign related parties only if the tax-
payer can specifically identify all recip-
ients of the substitute payments or other
payments paid by the taxpayer or the tax-
payer can specifically identify the payor
for all substitute payments or other pay-
ments with respect to the securities leg of
a securities lending transaction received
by foreign related parties. If a taxpayer
has paid any substitute payment or other
payment for which it cannot determine
the recipient and cannot specifically iden-
tify the payor for all substitute payments
received by foreign related parties, the
final regulations provide that the taxpayer
must use the alternative method provided
in § 1.59A-6(b)(3)(iv)(C).
The comment also recommended that
the final regulations provide additional
clarifying examples illustrating mark-
to-market adjustments and the operation
of the allocation method of proposed
§ 1.59A-6(b)(3)(iv). The Treasury Depart-
ment and the IRS consider the examples
that were provided in proposed § 1.59A-
6(b)(3)(iii)(B) to be sufficiently illustra-
tive of the mechanics of mark-to-mar-
ket adjustments; therefore, the clarity of
these rules will not be improved by add-
ing additional examples in the final reg-
ulations. The Treasury Department and
the IRS agree, however, that an example
illustrating the allocation method would
be helpful. Therefore, the final regula-
tions include an example of the allocation
method in § 1.59A-6(b)(3)(iv)(D).
Finally, the comment requested addi-
tional transition relief with respect to the
reporting requirements of § 1.6038A-2(b)
(7)(ix) such as a two-year phased imple-
mentation. The comment suggested that
in the first phase, the IRS could adopt
reduced reporting requirements or grant
safe harbor treatment for systems unable
to capture detailed data immediately to
allow time for internal systems upgrades
and process testing before requiring full
compliance. As an alternative, the com-
Bulletin No. 2026–4 361 January 20, 2026

January 20, 2026 362 Bulletin No. 2026–4
ment suggested permitting taxpayers to
submit evidence of system limitations
as the basis for temporary relief, while
establishing clear compliance milestones.
The final regulations do not adopt this
comment. Instead, the final regulations
retain the transition relief provided in the
proposed regulations, which delays the
applicability date of § 1.6038A-2(b)(7)
(ix). The rules relating to QDP reporting
apply to payments made in taxable years
beginning on or after January 1, 2027. It
is expected that this delayed applicability
date will give taxpayers sufficient time to
build and update the systems needed to
track QDPs.
Applicability Date
The preamble to the proposed regula-
tion explained that proposed §§ 1.59A-
3(b)(2)(iv) (application of BEAT netting
rule to securities lending transactions) and
1.59A-6(b)(3)(ii) through (iv) (QDP rules
relating to securities lending transactions)
would apply to taxable years beginning
on or after the date that final regulations
are filed with the Federal Register. The
text of proposed § 1.59A-10(c), how-
ever, mistakenly provided that proposed
§§ 1.59A–3(b)(2)(iv) and 1.59A–6(b)(3)
(iii) and (iv) would apply to taxable years
beginning on or after January 10, 2025,
which was the date that the proposed reg-
ulations were filed with the Federal Reg-
ister. Consistent with the preamble to the
proposed regulations, the final regulations
provide that §§ 1.59A-3(b)(2)(iv) and
1.59A-6(b)(3)(iii) and (iv) apply to tax-
able years beginning on or after December
17, 2025. However, taxpayers may choose
to apply these final rules to a taxable year
beginning on or after January 10, 2025,
and before December 17, 2025. Section
1.6038A-2(b)(7)(ix) (rules relating to
QDP reporting) applies to payments made
in taxable years beginning on or after Jan-
uary 1, 2027.
Special Analysis
I. Regulatory Planning and Review –
Economic Analysis
These final regulations are not subject
to review under section 6(b) of Executive
Order 12866 pursuant to the Memoran-
dum of Agreement (July 4, 2025) between
the Treasury Department and the Office
of Management and Budget regarding
review of tax regulations.
II. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management and
Budget (OMB) before collecting informa-
tion from the public, whether such collec-
tion of information is mandatory, voluntary,
or required to obtain or retain a benefit. An
agency may not conduct or sponsor, and a
person is not required to respond to, a col-
lection of information unless it displays a
valid control number assigned by the Office
of Management and Budget. These final
regulations do not create or impose any
additional information collection require-
ments in the form of reporting, recordkeep-
ing requirements, or third-party disclosure
statements. The collection requirements
are within Form 8991 and its instructions
which are included in the OMB Control
Number 1545-0123.
III. Regulatory Flexibility Act
Generally, the final regulations affect
only aggregate groups of corporations
with average annual gross receipts of at
least $500 million and that make pay-
ments to foreign related parties. Gen-
erally, only large businesses have both
substantial gross receipts and make pay-
ments to foreign related parties. In accor-
dance with the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.) the Secretary
hereby certifies that these final regula-
tions will not have a significant economic
impact on a substantial number of small
entities. Accordingly, a regulatory flexi-
bility analysis under the Regulatory Flex-
ibility Act is not required.
IV. Section 7805(f)
Pursuant to section 7805(f) of the
Code, the notice of proposed rulemaking
was submitted to the Chief Counsel for
Advocacy of the Small Business Admin-
istration for comment on their impact on
small business, and no comments were
received.
V. Unfunded Mandates Reform Act
Section 202 of the Unfunded Man-
dates Reform Act of 1995 requires that
agencies assess anticipated costs and
benefits and take certain other actions
before issuing a final rule that includes
any Federal mandate that may result
in expenditures in any one year by a
State, local, or Tribal government, in
the aggregate, or by the private sector,
of $100 million in 1995 dollars, updated
annually for inflation. The final regula-
tions do not include any Federal man-
date that may result in expenditures by
State, local, or Tribal governments, or
by the private sector in excess of that
threshold.
VI. Executive Order 13132: Federalism
Executive Order 13132 (entitled
“Federalism”) prohibits an agency from
publishing any rule that has federalism
implications if the rule either imposes
substantial, direct compliance costs on
State and local governments, and is not
required by statute, or preempts State law,
unless the agency meets the consultation
and funding requirements of section 6 of
the Executive order. The final regulations
do not have federalism implications and
do not impose substantial direct compli-
ance costs on State and local governments
or preempt State law within the meaning
of the Executive order.
Drafting Information
The principal authors of these final
regulations are D. Peter Merkel and Sheila
Ramaswamy of the Office of Associate
Chief Counsel (International). However,
other personnel from the Treasury Depart-
ment and the IRS participated in their
development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
Adoption of Amendments to the
Regulations
Accordingly, the Treasury Department
and IRS amend 26 CFR part 1 as follows:

Bulletin No. 2026–4 363 January 20, 2026
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as fol-
lows:
Authority: 26 U.S.C. 7805 * * *
§ 1.59A-2 [Amended]
Par. 2. Section 1.59A-2 is amended
by removing the language Ҥ 1.59A-3(b)
(2)(iii)” from the last sentence of para-
graph (e)(3)(vi) and adding the language
“§ 1.59A-3(b)(2)(iv)” in its place.
Par. 3. Section 1.59A-3 is amended by
revising paragraph (b)(2)(iv) to read as
follows:
§1.59A-3 Base erosion payments and
base erosion tax benefits.
* * * * *
(b) * * *
(2) * * *
(iv) Amounts paid or accrued with
respect to mark-to-market positions—
(A) In general. For any transaction with
respect to which the taxpayer applies the
mark-to-market method of accounting
for U.S. Federal income tax purposes, the
rules set forth in § 1.59A-2(e)(3)(vi) apply
to determine the amount of the base ero-
sion payment.
(B) Application of the base erosion and
anti-abuse tax (“BEAT”) netting rule to
securities lending transactions. Notwith-
standing paragraph (b)(2)(iv)(A) of this
section, mark-to-market gains and losses
from the securities leg of a securities lend-
ing transaction as defined in §§ 1.861-
2(a)(7) and 1.861-3(a)(6) are not taken
into account when applying § 1.59A-2(e)
(3)(vi) for purposes of determining the
amount of a taxpayer’s base erosion pay-
ment. Mark-to market gains and losses
from the securities leg of a securities
lending transaction are the ordinary gains
and losses that a taxpayer recognizes with
respect to the transaction by treating the
taxpayer’s position in the transaction as
having been sold for its fair market value
on the last business day of the taxable year
(and any additional times as required by
the Internal Revenue Code or the taxpay-
er’s method of accounting). See § 1.59A-
6(b)(1)(i). When determining the amount
of the taxpayer’s base erosion payment,
items of income, gain, loss, or deduction
that relate to the securities leg of a secu-
rities lending transaction, such as substi-
tute payments defined in §§ 1.861-2(a)(7)
and 1.861-3(a)(6) and borrow fees, must
be taken into account on a consistent basis
that does not result in the duplication or
omission of these amounts. For purposes
of the immediately preceding sentence,
the term items of income, gain, loss, or
deduction that relate to the securities leg
of a securities lending transaction does
not include delivery of the securities to,
or receipt of securities from, the lender.
This paragraph (b)(2)(iv)(B) applies to
a taxpayer that is either the borrower or
lender with respect to the securities lend-
ing transaction.
* * * * *
Par. 4. Section 1.59A-6 is amended by
adding paragraphs (b)(3)(iii) and (iv) to
read as follows:
§1.59A-6 Qualified derivative payment.
* * * * *
(b) * * *
(3) * * *
(iii) Special rule for mark-to-market
gains and losses on the securities leg of
a securities lending transaction—(A)
In general. The amount of any qualified
derivative payment with respect to the
securities leg of a securities lending trans-
action as defined in §§ 1.861-2(a)(7) and
1.861-3(a)(6) that is excluded from the
denominator of the base erosion percent-
age is determined under § 1.59A-3(b)(2)
(iv)(B). The securities leg of a securities
lending transaction refers to the rights,
obligations, and transfers of securities and
payments under the transaction other than
the obligation to provide or right to receive
cash collateral and interest thereon. Pur-
suant to § 1.59A-3(b)(2)(iv)(B), mark-to-
market gains and losses on a securities leg
of a securities lending transaction are not
included in determining the amount of the
qualified derivative payment with respect
to that security. Thus, the amount of the
qualified derivative payment with respect
to the securities leg of a securities lending
transaction is determined by taking into
account only other items of income, gain,
loss, or deduction during the taxable year
that relate to the securities leg, such as
substitute payments defined in §§ 1.861-
2(a)(7) and 1.861-3(a)(6) and borrow fees.
This paragraph (b)(3)(iii)(A) applies to
a taxpayer that is either the borrower or
lender with respect to the securities lend-
ing transaction.
(B) Examples. The following examples
illustrate the application of this paragraph
(b)(3)(iii).
(1) Example 1: Securities loan—(i) Facts. FP is
a foreign corporation that owns all of the shares of
DC, a domestic corporation. FP is a foreign related
party of DC under § 1.59A-1(b)(12). DC is a reg-
istered securities dealer. On September 1 of year 1,
DC enters into a securities lending transaction with
FP in which it borrows stock from FP. DC provides
cash collateral for the loan and receives a rebate on
that collateral from FP. On September 1, year 1, the
stock has a value of $100x. On November 1, year 1, a
dividend of $1x is paid by the issuer on the stock. DC
pays a substitute dividend of $1x to FP on November
1, year 1 under the terms of the securities loan. There
are no other payments made or received in year 1. On
December 31, year 1, the stock has a value of $106x.
DC is required to mark-to-market the securities leg
of the securities lending transaction for U.S. Federal
income tax purposes. DC is a calendar year taxpayer.
(ii) Analysis. DC has a deduction of $1x as a
result of the substitute dividend it pays to FP. Assum-
ing that the securities lending transaction otherwise
meets the requirements of this section (including
reporting the information required by § 1.6038A-
2(b)(7)(ix)), the amount of DC’s qualified deriva-
tive payment with respect to the securities lending
transaction is $1x. Payments with respect to the
cash collateral are not treated as part of the securi-
ties lending transaction. See paragraph (d)(2)(iii)(B)
of this section. With respect to the securities leg of
the securities lending transaction, DC has a mark-to-
market loss of ($6x). Under paragraph (b)(3)(iii)(A)
of this section, the amount of this mark-to-market
loss is not included when determining the amount
of the qualified derivative payment. Under § 1.59A-
3(b)(2)(iv)(B), DC’s ($6x) mark-to-market loss on
the securities leg of the securities lending transac-
tion also is not taken into account in determining
the base erosion tax benefit amount for purposes of
the numerator of the base erosion percentage. The
($6x) loss is taken into account in the denominator
of the base erosion percentage, while the $1x substi-
tute dividend payment is not taken into account for
that purpose because it is a qualified derivative pay-
ment. See § 1.59A-2(e)(3)(ii)(C) and (e)(3)(vi). The
amount of the qualified derivative payment would be
the same if the lender paid a rebate on the cash collat-
eral in year 1, without regard to whether the parties
agree to pay and receive a net payment reflecting the
difference between the amount of the rebate and the
amount of the substitute payment.
(2) Example 2: Securities loan. The facts are the
same as in paragraph (b)(3)(iii)(B)(1) of this section
(Example 1) except that on December 31, year 1, the
stock has a value of $94x. With respect to the securi-
ties leg of the securities lending transaction, DC has
a mark-to-market gain of $6x. Under paragraph (b)
(3)(iii)(A) of this section, the amount of this mark-
to-market gain is not included when determining
the amount of the qualified derivative payment. DC

January 20, 2026 364 Bulletin No. 2026–4
has a deduction of $1x as a result of the substitute
dividend payment it makes to FP. Assuming that the
securities lending transaction otherwise meets the
requirements of this section (including reporting the
information required by § 1.6038A-2(b)(7)(ix)), the
amount of DC’s qualified derivative payment with
respect to the securities lending transaction is $1x.
Neither the $6x gain nor the $1x substitute dividend
payment, which is a qualified derivative payment,
are taken into account in the denominator of the base
erosion percentage.
(iv) Rule for determining the amount of a substi-
tute payment or other payment paid with respect to
a securities lending transaction to a foreign related
party—(A) In general. When a taxpayer makes a
substitute payment as defined in § 1.861-2(a)(7) or
§ 1.861-3(a)(6) or other payment with respect to the
securities leg of a securities lending transaction, the
taxpayer must determine whether the substitute pay-
ment or other payment is paid to a foreign related
party. The amount of the substitute payment or other
payment paid by the taxpayer to a foreign related
party is determined under either paragraph (b)(3)(iv)
(B) or (C) of this section.
(B) Specific identification method. The taxpayer
may determine the amount of the substitute payments
or other payments with respect to the securities leg of
a securities lending transaction that it has paid to for-
eign related parties by using the amount actually paid
by the taxpayer to the foreign related parties if the
taxpayer can specifically identify all recipients of the
substitute payments or other payments paid by the
taxpayer during the taxable year with respect to the
securities leg of a securities lending transaction or
the taxpayer can specifically identify the payor for all
substitute payments or other payments received by
foreign related parties during the taxable year with
respect to the securities leg of a securities lending
transaction.
(C) Alternative method. If the taxpayer has
paid any substitute payment or other payment with
respect to the securities leg of a securities lending
transaction to which the taxpayer cannot apply para-
graph (b)(3)(iv)(B) of this section, the taxpayer must
use the methodology provided in this paragraph (b)
(3)(iv)(C).
(1) Step 1: Determining the total amount of
substitute payments and other payments received
by foreign related parties. The taxpayer must deter-
mine the total amount of substitute payments and
other payments with respect to the securities leg of
a securities lending transaction received by all for-
eign related parties of the taxpayer during the taxable
year.
(2) Step 2: Determining the total amount of sub-
stitute payments and other payments paid by tax-
payer. The taxpayer must determine the total amount
of substitute payments and other payments with
respect to the securities leg of a securities lending
transaction paid by the taxpayer during the taxable
year.
(3) Step 3: Determining the amount of substitute
payments and other payments paid by the taxpayer
to foreign related parties. The amount of substitute
payments and other payments with respect to the
securities leg of a securities lending transaction paid
by the taxpayer is treated as being paid first to foreign
related parties of the taxpayer up to the total amount
of substitute payments and other payments with
respect to the securities leg of a securities lending
transaction received by foreign related parties. Any
amount of substitute payments and other payments
with respect to the securities leg of a securities lend-
ing transaction paid by the taxpayer that exceeds the
amount of substitute payments and other payments
received by foreign related parties is treated as paid
to unrelated parties for purposes of this paragraph (b)
(3)(iv)(C)(3).
(D) Example—(1) Facts. FP is a foreign corpo-
ration that owns all of the shares of DC, a domestic
corporation, and all of the shares of several foreign
subsidiaries. FP and its foreign subsidiaries are for-
eign related parties of DC under § 1.59A-1(b)(12).
DC is a registered securities dealer. DC enters into
securities lending transactions pursuant to which it
borrows securities both from foreign affiliates that
are members of the FP controlled group and from
unrelated customers. DC obtains the securities from
a common pool of available securities that includes
securities from DC’s U.S. customer accounts as well
as securities held by members of the FP controlled
group for their own account and for the account
of customers. DC is unable to determine from its
records either the identities of the counterparties
from which DC has borrowed securities or whether
it has entered into a securities lending transaction
with a foreign affiliate. In year 1, DC makes sub-
stitute payments of $500x in aggregate with respect
to the securities lending transactions. DC’s foreign
affiliates receive substitute payments in year 1 total-
ing $100x. Because DC cannot determine whether it
has entered into a securities lending transaction with
a foreign affiliate, DC does not know what portion
of the $100x received by DC’s foreign affiliates was
paid by DC.
(2) Analysis. Because DC is unable to determine
the actual amount of substitute payments it has paid
to DC’s foreign affiliates, DC cannot use the specific
identification method of paragraph (b)(3)(iv)(B) of
this section to determine the amount of substitute
payments it has paid to foreign related parties for
QDP reporting purposes. Instead, DC must use the
alternative method set forth in paragraph (b)(3)(iv)
(C) of this section to determine the amount of sub-
stitute payments treated as made to foreign related
party recipients. Under Step 1, DC determines that
its foreign affiliates have received substitute pay-
ments of $100x. Under Step 2, DC determines that it
has paid substitute payments totaling $500x. Under
Step 3, DC is treated as having paid substitute pay-
ments to its foreign affiliates of $100x, up to the total
amount of substitute payments they received in year
1. The remaining $400x of substitute payments paid
by DC is treated as having been paid to unrelated
parties for purposes of paragraph (b)(3)(iv)(C)(3) of
this section.
* * * * *
Par. 5. Section 1.59A-10 is amended
by revising paragraph (a) and adding para-
graph (c) to read as follows:
§1.59A-10 Applicability date.
(a) General applicability date. Sec-
tions 1.59A-1 through 1.59A-9, other
than the provisions described in the first
sentence of paragraph (b) of this sec-
tion or in paragraph (c) of this section,
apply to taxable years ending on or after
December 17, 2018. However, taxpay-
ers may apply the regulations in this
paragraph (a) in their entirety for taxable
years beginning after December 31, 2017,
and ending before December 17, 2018. In
lieu of applying the regulations referred
to in the first sentence of this paragraph
(a), taxpayers may apply the provisions
matching §§ 1.59A-1 through 1.59A-9
from the Internal Revenue Bulletin (IRB)
2019-02 (https://www.irs.gov/irb/2019-
02_IRB) in their entirety for all taxable
years beginning after December 31,
2017, and ending on or before December
6, 2019.
* * * * *
(c) Additional applicability dates for
certain rules relating to securities lend-
ing transactions. Sections 1.59A-3(b)(2)
(iv) and 1.59A-6(b)(3)(iii) and (iv) apply
to taxable years beginning on or after
December 17, 2025.
Par. 6. Section 1.6038A-2 is amended
by revising the third sentence of paragraph
(g) to read as follows:
§1.6038A-2 Requirement of return.
* * * * *
(g) * * * Paragraph (b)(7)(ix) of this
section applies to payments made in tax-
able years beginning on or after January
1, 2027. * * *
Frank J. Bisignano,
Chief Executive Officer.
Approved: October 30, 2025
Kenneth J. Kies,
Assistant Secretary of the Treasury (Tax
Policy).
(Filed by the Office of the Federal Register Decem-
ber 17, 2025, 8:45 a.m., and published in the issue
of the Federal Register for December 18, 2025, 90
FR 59046)

Bulletin No. 2026–4 365 January 20, 2026
Part III
Safe Harbor for the
Credit for Carbon Oxide
Sequestration under
Section 45Q for Qualified
Carbon Oxide Disposed
of in Secure Geological
Storage in Calendar Year
2025
Notice 2026-1
SECTION 1. PURPOSE
This notice provides interim guidance,
pending the issuance of forthcoming pro-
posed regulations, relating to the credit for
carbon oxide sequestration under section
45Q (§ 45Q credit) of the Internal Rev-
enue Code (Code)
1
in light of the Envi-
ronmental Protection Agency’s (EPA)
proposed regulations to remove report-
ing obligations regarding the geological
sequestration of carbon dioxide imposed
under subpart RR of 40 CFR part 98 (sub-
part RR). See 90 F.R. 44591 (Sept. 16,
2025). Specifically, this notice provides
a safe harbor for determining eligibility
for the § 45Q credit for qualified carbon
oxide that is captured and disposed of in
secure geological storage (and carbon
oxide described in § 1.45Q-2(h)(5)) and
not used as a tertiary injectant in a qual-
ified enhanced oil or natural gas recovery
project during calendar year 2025 (Cal-
endar Year 2025 Secure Geological Stor-
age) in the event the EPA does not launch
the electronic Greenhouse Gas Reporting
Tool (e-GGRT) for filers to prepare and
submit information required under sub-
part RR for reporting year 2025 by June
10, 2026. The Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) expect that the
forthcoming proposed regulations will
propose updated requirements for taxpay-
ers claiming the credit for secure geolog-
ical storage after the 2025 calendar year.
Taxpayers may rely on the safe harbor and
guidance described in section 3 of this
notice to demonstrate compliance with
the subpart RR requirements of § 1.45Q-
3(b)(1)(ii) or 1.45Q-2(h)(5)(iii), as appli-
cable, and § 1.45Q-3(d), for purposes of
determining the § 45Q credit with respect
to 2025 Calendar Year Secure Geological
Storage.
SECTION 2. BACKGROUND
.01 Section 45Q
(1) Section 45Q was added to the Code
by § 115 of Division B of the Energy
Improvement and Extension Act of 2008,
Pub. L. 110-343, 122 Stat. 3765, 3829
(Oct. 3, 2008). Section 45Q was amended
a number of times thereafter, including
most recently by § 70522 of Public Law
119-21, 139 Stat. 72, 279 (July 4, 2025),
commonly known as the One, Big, Beau-
tiful Bill Act (OBBBA).
2

(2) Section 45Q(a)(1) allows a credit
of $20 per metric ton of qualified carbon
oxide (i) captured by the taxpayer using
carbon capture equipment which is origi-
nally placed in service at a qualified facil-
ity before February 9, 2018; (ii) disposed
of by the taxpayer in secure geological
storage; and (iii) neither used by the tax-
payer as a tertiary injectant in a qualified
enhanced oil or natural gas recovery proj-
ect nor utilized in a manner described in
section 45Q(f)(5).
(3) Section 45Q(a)(2) allows a credit
of $10 per metric ton of qualified car-
bon oxide (i) captured by the taxpayer
using carbon capture equipment which
is originally placed in service at a quali-
fied facility before February 9, 2018; and
(ii) either (A) used by the taxpayer as a
tertiary injectant in a qualified enhanced
oil or natural gas recovery project and
disposed of by the taxpayer in secure
geological storage; or (B) utilized by the
taxpayer in a manner described in section
45Q(f)(5).
(4) Section 45Q(a)(3) allows a credit
of the applicable dollar amount (as deter-
mined under section 45Q(b)(1)) per metric
ton of qualified carbon oxide captured by
the taxpayer using carbon capture equip-
ment which is originally placed in service
at a qualified facility on or after February
9, 2018, during the 12-year period begin-
ning on the date the equipment was origi-
nally placed in service, and (i) disposed of
by the taxpayer in secure geological stor-
age, (ii) used by the taxpayer as a tertiary
injectant in a qualified enhanced oil or
natural gas recovery project and disposed
of by the taxpayer in secure geological
storage, or (iii) utilized by the taxpayer in
a manner described in section 45Q(f)(5).
(5) Section 45Q(f)(2) directs the Sec-
retary of the Treasury or the Secretary’s
delegate (Secretary), in consultation with
the EPA, the Secretary of Energy, and
the Secretary of the Interior, to establish
regulations for determining adequate
security measures for the geological stor-
age of qualified carbon oxide under sec-
tion 45Q(a) such that the qualified carbon
oxide does not escape into the atmosphere.
Section 45Q(f)(2) further provides that
the term “geological storage of qualified
carbon oxide” includes storage at deep
saline formations, oil and gas reservoirs,
and unminable coal seams under such
conditions as the Secretary may determine
under such regulations.
(6) On June 2, 2020, the Treasury
Department and the IRS published a
notice of proposed rulemaking (REG-
112339-19) in the Federal Register (85
F.R. 34050) under section 45Q. After
consideration of all comments received in
response to the proposed regulations, on
January 15, 2021, the Treasury Depart-
ment and the IRS, in consultation with
the EPA, Department of Energy, and the
Department of the Interior, published final
regulations in the Federal Register under
section 45Q. See T.D. 9944; 86 F.R. 4728,
as corrected in 86 F.R. 16530 (March 30,
2021).
1
Unless otherwise specified, all “section” or “§” references are to the Code or the Income Tax Regulations (26 CFR part 1).
2
Section 70522 of the OBBBA modified section 45Q to disallow the credit if the taxpayer is a specified foreign entity as defined in section 7701(a)(51)(B) of the Code or a foreign influenced
entity as defined in section 7701(a)(51)(D), determined without regard to clause (i)(II) thereof, for taxable years beginning after July 4, 2025. Section 70522 of the OBBBA also modified
section 45Q to establish parity between the credit amount for the different uses and utilization of qualified carbon oxide and the credit amount for disposal in secure geological storage for
facilities or equipment placed in service after July 4, 2025.

January 20, 2026 366 Bulletin No. 2026–4
(7) Section 1.45Q-3(a) provides that,
in general, to qualify for the § 45Q credit,
a taxpayer must either physically or con-
tractually dispose of captured qualified
carbon oxide in secure geological storage
in the manner provided in § 1.45Q-3(b),
or utilize qualified carbon oxide in a man-
ner conforming with section 45Q(f)(5)
and § 1.45Q-4. Secure geological storage
includes, but is not limited to, storage at
deep saline formations, oil and gas reser-
voirs, and unminable coal seams.
(8) Section 1.45Q-3(b) provides that
for purposes of the § 45Q credit, qualified
carbon oxide is considered disposed of
by the taxpayer in secure geological stor-
age such that the qualified carbon oxide
does not escape into the atmosphere if
the qualified carbon oxide is (1) injected
into a well that (i) complies with appli-
cable Underground Injection Control or
other regulations, located onshore or off-
shore under submerged lands within the
territorial jurisdiction of States or federal
waters, and (ii) is not used as a tertiary
injectant in a qualified enhanced oil or
natural gas recovery project, in compli-
ance with applicable requirements under
subpart RR; or (2) injected into a well
that (i) complies with applicable Under-
ground Injection Control or other regula-
tions, is located onshore or offshore under
submerged lands within the territorial
jurisdiction of States or Federal waters,
and (ii) is used as a tertiary injectant in
a qualified enhanced oil or natural gas
recovery project and stored in compli-
ance with applicable requirements under
subpart RR, or the International Organiza-
tion for Standardization (ISO) standards
endorsed by the American National Stan-
dards Institute (ANSI) under CSA/ANSI
ISO 27916:2019, Carbon dioxide capture,
transportation and geological storage—
Carbon dioxide storage using enhanced
oil recovery (CO
2
-EOR) (CSA/ANSI ISO
27916:2019).
(9) Section 1.45Q-2(h)(5) provides
that, in general, carbon oxide that is
injected into an oil reservoir that is not
a qualified enhanced oil recovery project
under section 43(c)(2) of the Code due to
circumstances such as the first injection
of a tertiary injectant occurring before
1991, or because a petroleum engineer’s
certification was not timely filed, cannot
be treated as qualified carbon oxide, dis-
posed of in secure geological storage, or
utilized in a manner described in section
45Q(f)(5). Section 1.45Q-2(h)(5) does not
apply to an oil reservoir if: (i) the reservoir
has permanently ceased oil production;
(ii) the operator has obtained an Under-
ground Injection Control Class VI permit;
and (iii) the operator complies with sub-
part RR.
(10) Section 1.45Q-3(d) provides that
for qualified enhanced oil or natural gas
recovery projects in which the taxpayer
reported volumes of carbon oxide to the
EPA pursuant to subpart RR, the taxpayer
may self-certify the volume of qualified
carbon oxide claimed for purposes of
section 45Q. For qualified enhanced oil
or natural gas recovery projects in which
the taxpayer determined volumes pur-
suant to CSA/ANSI ISO 27916:2019, a
taxpayer may prepare documentation as
outlined in CSA/ANSI ISO 27916:2019
internally, but all such documentation
must be provided to a qualified inde-
pendent engineer or geologist, who then
must certify that the documentation pro-
vided, including the mass balance calcu-
lations as well as information regarding
monitoring and containment assurance,
is accurate and complete. The qualified
independent engineer or geologist certi-
fying a project must be duly registered
or certified in any State. The certification
must contain an affidavit from the certi-
fying engineer or geologist stating that he
or she is independent from the taxpayer
(and if an election under section 45Q(f)
(3)(B) has been made, the affidavit must
state that he or she is independent from
both the electing taxpayer and the credit
claimant). Certifications must be made
annually and under penalties of perjury.
For any leaked amount of qualified car-
bon oxide (as defined in § 1.45Q-5(c))
that is determined pursuant to CSA/ANSI
ISO 27916:2019, the certification must
also include a statement that the quantity
was determined in accordance with sound
engineering principles. Taxpayers that
capture and dispose of qualified carbon
oxide giving rise to the § 45Q credit must
file Form 8933, Carbon Oxide Seques-
tration Credit, with a timely filed Federal
income tax return or Form 1065, U.S.
Return of Partnership Income, includ-
ing extensions or amendments to Federal
income tax returns, Forms 1065, or on
administrative adjustment requests under
section 6227 (AARs), as applicable.
.02 EPA Regulations
(1) Under the Safe Drinking Water
Act and regulations promulgated thereun-
der, injection of carbon dioxide into any
underground reservoir requires the opera-
tor to comply with Underground Injection
Control (UIC) program regulations and to
obtain the appropriate UIC well permits.
The UIC program is designed to protect
underground sources of drinking water
from underground injection. Under 40
CFR § 146.5 (Classification of injection
wells), Class VI is an appropriate UIC
well permit for wells that are not exper-
imental in nature and that are used for
geologic sequestration of carbon dioxide
beneath the lowermost formation contain-
ing an underground source of drinking
water; for wells used for geologic seques-
tration of carbon dioxide that have been
granted a waiver of the injection depth
requirements pursuant to requirements at
40 CFR 146.95; or for wells used for geo-
logic sequestration of carbon dioxide that
have received an expansion to the areal
extent of an existing Class II enhanced oil
recovery or enhanced gas recovery aquifer
exemption pursuant to 40 CFR §§ 146.4
and 144.7(d).
(2) Operators that inject carbon diox-
ide underground are also subject to the
EPA’s Greenhouse Gas Reporting Pro-
gram (GHGRP) requirements set forth
at 40 CFR Part 98. Under 40 CFR Part
98, facilities that inject carbon dioxide
underground for long-term containment
of carbon dioxide in subsurface geologic
formations are specifically subject to sub-
part RR (Geologic Sequestration of Car-
bon Dioxide source category). Facilities
that are subject to subpart RR, including
UIC Class VI wells, are required to report
basic information on carbon dioxide
received for injection, develop and imple-
ment an EPA-approved site-specific Mon-
itoring, Reporting, and Verification Plan,
and report the amount of carbon dioxide
geologically sequestered using a mass
balance approach and annual monitoring
activities. Such reports under subpart RR
must be prepared on a calendar year basis
(Annual Reports).
(3) Annual Reports generally must
be submitted no later than March 31 of
each calendar year for greenhouse gas

Bulletin No. 2026–4 367 January 20, 2026
emissions in the previous calendar year.
40 CFR § 98.3(b). Annual Reports are
required to be submitted electronically in
a format specified by the Administrator
of the EPA. 40 CFR § 98.5(a). The EPA
generally requires Annual Reports to be
submitted through the EPA’s electronic
reporting system, e-GGRT. Historically,
the EPA has launched the e-GGRT system
in mid-February for a given reporting year.
See EPA, “Extending the Reporting Dead-
line Under the Greenhouse Gas Report-
ing Rule for 2024 Data,” 90 F.R. 13085,
13087 (March 20, 2025). Annual Reports
undergo verification by the EPA, and
non-confidential data from these reports
are published on the EPA’s website.
(4) On September 16, 2025, the EPA
issued proposed regulations, Reconsider-
ation of the Greenhouse Gas Reporting
Program, 90 F.R. 44591, proposing to
amend the GHGRP to remove program
obligations for most source categories,
including the obligations in subpart RR,
for reporting years after 2024. The pro-
posed regulations would also revise 40
CFR Part 98 subpart A to extend the Part
98 (including subpart RR) reporting dead-
line for reporting year 2025 from March
31, 2026, to June 10, 2026. The EPA has
proposed that the amendments, if final-
ized, would become effective within sixty
days of publication in the Federal Reg-
ister. Because the proposed amendments
would remove the reporting obligations
under subpart RR following reporting
year 2024, reporters would cease submit-
ting Annual Reports within sixty days of
publication of the final rule in the Federal
Register. 90 F.R. at 44603.
SECTION 3. SAFE HARBOR FOR
CALENDAR YEAR 2025 SECURE
GEOLOGICAL STORAGE
.01 In General. This section describes a
safe harbor that taxpayers may use to sat-
isfy the requirements of § 1.45Q-3(b)(1)
(ii) or § 1.45Q-2(h)(5)(iii), as applicable,
and § 1.45Q-3(d), for Calendar Year 2025
Secure Geological Storage in the event
the EPA does not launch the e-GGRT for
reporting year 2025 by June 10, 2026
(2025 Safe Harbor). The 2025 Safe Har-
bor does not apply to such storage in the
event the EPA launches the e-GGRT for
reporting year 2025 by June 10, 2026.
.02 2025 Safe Harbor.
(1) In general. Taxpayers following
the guidance set forth in sections 3.02(2)
and 3.02(3) of this notice will be consid-
ered to have satisfied (i) the requirement
in §1.45Q-3(b)(1)(ii) or § 1.45Q-2(h)(5)
(iii), as applicable, related to subpart RR
(§ 45Q Subpart RR Requirement); and (ii)
the requirements of § 1.45Q-3(d) (Certifi-
cation Requirements).
(2) Compliance with § 45Q Subpart RR
Requirement. In the event the EPA does
not launch the e-GGRT for reporting year
2025 by June 10, 2026, for Calendar Year
2025 Secure Geological Storage, such
storage will be considered to have satis-
fied the § 45Q Subpart RR Requirement if
(i) such storage is in compliance with the
applicable requirements of subpart RR as
in effect on December 31, 2025, and (ii)
instead of submitting the Annual Report
for reporting year 2025 with respect to
such storage through the e-GGRT pursuant
to 40 CFR §§ 98.3 and 98.5, the taxpayer
prepares and submits the Annual Report
to an independent engineer or geologist,
who certifies the Annual Report, in the
manner specified in section 3.02(3)(A)
and (B) of this notice. The Annual Report
for reporting year 2025 must contain all
of the information and documentation,
including mass balance accounting calcu-
lations and monitoring and containment
assurance, that would have been required
under subpart RR as in effect on Decem-
ber 31, 2025.
(3) Compliance with Certification
Requirements. Calendar Year 2025 Secure
Geological Storage will be considered to
have satisfied the Certification Require-
ments of § 1.45Q-3(d) if the taxpayer sat-
isfies the requirements of section 3.02(3)
(A) and (B) of this notice with respect to
such storage.
(A) The taxpayer must submit the
Annual Report for reporting year 2025 to
a qualified independent engineer or geol-
ogist. The qualified independent engineer
or geologist certifying the information
must be duly registered or certified in any
State.
(B) The qualified independent engineer
or geologist must certify that (i) the cap-
ture and disposal described in § 1.45Q-
3(b)(1) or § 1.45Q-2(h)(5), as applicable,
is in compliance with subpart RR as in
effect on December 31, 2025, and (ii) the
information and documentation contained
in the Annual Report for reporting year
2025 is accurate and complete based upon
the requirements under subpart RR as in
effect on December 31, 2025. The certi-
fication must contain an affidavit from
the certifying engineer or geologist stat-
ing that he or she is independent from the
taxpayer (and if an election under section
45Q(f)(3)(B) has been made, the affidavit
must state that he or she is independent
from both the electing taxpayer and the
credit claimant). The certification must be
made under penalties of perjury.
.03 Timely reporting. Taxpayers that
capture and dispose of qualified carbon
oxide giving rise to the § 45Q credit must
file Form 8933 with a timely filed Federal
income tax return or Form 1065, includ-
ing extensions, or amendments to Federal
income tax returns, Forms 1065, or on
AARs, as applicable. In order to rely upon
the 2025 Safe Harbor, a taxpayer must
complete all documentation and obtain the
certification described in section 3.02(2)
and (3) of this notice by the time it (or
if an election under § 45Q(f)(3)(B) has
been made, any credit claimant) timely
files its relevant tax return, as described in
the preceding sentence. Taxpayers should
retain the documentation and certification
described in section 3.02(2) and (3) of this
notice in their books and records pursu-
ant to § 6001. See also T.D. 9944; 86 F.R.
4728, 4758-59.
SECTION 4. PAPERWORK
REDUCTION ACT
The collection of information con-
tained in this notice has been submitted to
the Office of Management and Budget in
accordance with the Paperwork Reduction
Act (44 U.S.C. § 3507). The estimated
burden for individual filers is approved
under OMB control number 1545-0074;
for business filers, it is approved under
OMB control number 1545-0123; and for
trust filers, it is approved under OMB con-
trol number 1545-0092.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
The collections of information in this
notice are in section 3 of this notice. This

January 20, 2026 368 Bulletin No. 2026–4
information is required to certify the vol-
ume of qualified carbon oxide disposed of
in secure geological storage for the pur-
pose of claiming the § 45Q credit. This
information will be used by the IRS to
verify that the taxpayer is eligible for the
§ 45Q credit. The collection of informa-
tion is required to obtain a benefit. The
likely respondents are businesses or other
for-profit institutions.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by § 6103.
SECTION 5. APPLICABILITY DATE
This notice applies with respect to Cal-
endar Year 2025 Secure Geological Stor-
age in the event the EPA does not launch
the e-GGRT for reporting year 2025 by
June 10, 2026. Taxpayers claiming the
§ 45Q credit for Calendar Year 2025
Secure Geological Storage may rely upon
this notice to satisfy the requirements of
§ 1.45Q-3(b)(1)(ii) or 1.45Q-2(h)(5)(iii),
as applicable, and § 1.45Q-3(d).
SECTION 6. DRAFTING
INFORMATION
The principal author of this notice is
the Office of Associate Chief Counsel
(Energy, Credits, and Excise Tax). For fur-
ther information regarding this notice con-
tact (202) 317-6853 (not a toll-free call).
Notice of Issuance of
Revenue Procedure
2026-8 Regarding Group
Exemption Letter Program
Notice 2026-8
SECTION I. PURPOSE
This notice discusses the comments
received in response to the proposed rev-
enue procedure set forth in Notice 2020-
36, 2020-21 I.R.B. 840, along with the
modifications made in response to those
comments and other significant revisions
made by the Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) to the proposed
revenue procedure, which is published
in final form as Rev. Proc. 2026-8, in this
Bulletin.
SECTION II. BACKGROUND
On May 18, 2020, the Treasury Depart-
ment and the IRS published Notice 2020-
36, which contained a proposed revenue
procedure 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).
The proposed revenue procedure provided
updated procedures for a central organiza-
tion described in § 501(c) of the Internal
Revenue Code (Code)
1
to obtain recogni-
tion of exemption from federal income tax
on a group basis for subordinate organiza-
tions described in § 501(c) that are affili-
ated with and under the general supervi-
sion or control of the central organization.
The proposed revenue procedure also
set forth updated procedures that a cen-
tral organization would need to follow to
maintain a group exemption letter. Under
Notice 2020-36, the IRS stopped accept-
ing applications for group exemption let-
ters (group applications) starting on June
17, 2020 (30 days after the notice was
published in the Internal Revenue Bulle-
tin). As explained in section 2.08 of Rev.
Proc. 2026-8, the IRS resumed accepting
group applications after January 20, 2026,
the date of its publication in the Internal
Revenue Bulletin.
Notice 2020-36 requested comments
on all aspects of the proposed revenue
procedure because the Treasury Depart-
ment and the IRS recognized that many
of the updated provisions substantially
differed from the procedures set forth in
Rev. Proc. 80-27. The Treasury Depart-
ment and the IRS also recognized that the
new procedures might impose additional
administrative burdens on existing central
organizations and wanted to afford those
organizations an opportunity to comment
on the updated procedures. Notice 2020-
36 specifically requested comments on the
following:
• 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
(Supplemental Group Ruling Infor-
mation or SGRI) of the proposed rev-
enue procedure;
• 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
• whether central organizations with
more than one preexisting group
exemption letter would benefit from
procedures permitting the consolida-
tion or transfer of one or more preex-
isting group exemption letters.
SECTION III. COMMENT
SUMMARY AND CHANGES
TO THE PROPOSED REVENUE
PROCEDURE
This section III summarizes the major
provisions of the proposed revenue proce-
dure, the substantive comments submitted
in response to the proposed revenue pro-
cedure, and the material changes to the
proposed revenue procedure that are incor-
porated in Rev. Proc. 2026-8. The Treasury
Department and the IRS received 29 writ-
ten comments in response to Notice 2020-
36. The comments are available for public
inspection upon request. Feedback in those
comments informed the development of the
finalized procedures in Rev. Proc. 2026-8.
.01 Minimum Number of Subordinate
Organizations Requirement.
Section 3.01(2) of the proposed rev-
enue procedure required a central orga-
nization to have at least five subordinate
organizations to obtain a group exemption
letter and at least one subordinate orga-
1
Unless otherwise specified, all “Section” or “§” references are to sections of the Code.

Bulletin No. 2026–4 369 January 20, 2026
nization to maintain a group exemption
letter thereafter. One commenter recom-
mended eliminating the first requirement,
stating that it would discourage the use of
group exemptions by making it more dif-
ficult for a central organization to recruit
enough subordinate organizations to
obtain a group exemption letter.
The Treasury Department and the IRS
disagree with this comment. As explained
in Notice 2020-36, the requirement for a
central organization to have a minimum
number of subordinate organizations to
obtain a group exemption letter is due to
the administrative burden that processing
group applications imposes on the IRS.
Notice 2020-36 noted that the adminis-
trative burden of processing one group
application is comparable to the adminis-
trative burden of processing four individ-
ual exemption applications. Eliminating
the requirement that a central organiza-
tion have five subordinate organizations
to obtain a group exemption letter would
render the group exemption letter program
inefficient in circumstances where a group
application includes fewer than five sub-
ordinate organizations. Accordingly, sec-
tion 4.01(2) of Rev. Proc. 2026-8 retains
the requirement that a central organization
have five subordinate organizations to
obtain a group exemption letter because
it appropriately balances the burdens
the IRS faces in administering the group
exemption letter program and the burdens
central organizations face in complying
with the requirements to obtain the bene-
fits of the group exemption letter program.
.02 Central Organizations Maintaining
More Than One Group Exemption Letter.
Section 3.01(3) of the proposed reve-
nue procedure prohibited a central orga-
nization from maintaining more than one
group exemption letter. Several comment-
ers objected to this provision, claiming
that it would decrease transparency and
place significant administrative burdens
on a central organization, particularly if
coupled with the proposed revenue proce-
dure’s requirements involving matching,
foundation classification, and uniform
governing instruments.
As noted in Notice 2020-36, restricting
the number of group exemption letters a
central organization can maintain is neces-
sary because traditionally, the IRS’s elec-
tronic databases have not systematically
tracked more than one group exemption
letter per central organization. Moreover,
maintaining more than one group exemp-
tion letter may adversely affect a central
organization’s ability to exercise general
supervision or control over its subordi-
nate organizations. Accordingly, section
4.01(3) of Rev. Proc. 2026-8 continues to
prohibit a central organization from main-
taining more than one group exemption
letter. The commenters’ concerns about
the administrative burden of the prohibi-
tion on maintaining more than one group
exemption letter given the proposed rev-
enue procedure’s requirements involv-
ing matching, foundation classification,
and uniform governing instruments are
addressed by the revisions to those provi-
sions discussed in sections III.08, III.09,
and III.11 of this notice.
.03 Affiliation Requirement.
Section 3.02(1) and (2) of the proposed
revenue procedure required a central orga-
nization to establish that each subordinate
organization to be included in the group
exemption letter is affiliated with the cen-
tral organization and stated that a subor-
dinate organization’s affiliation with the
central organization is demonstrated by
the entirety of the information required
to be submitted in section 5.03 of the pro-
posed revenue procedure. One commenter
requested more clarity regarding the
standard for determining whether a sub-
ordinate organization is affiliated with a
central organization. In response, section
4.02(2) of Rev. Proc. 2026-8 adds sev-
eral examples illustrating how a central
organization may demonstrate affiliation
with its subordinate organizations, while
reforming the “entirety of the informa-
tion” standard regarding affiliation that
is set forth in section 3.02(2) of the pro-
posed revenue procedure into a standard
that reviews all “facts and circumstances
showing that [the subordinate organiza-
tion] is a chapter, local, post, or unit of the
central organization.”
.04 General Supervision Standard.
Section 3.02(1) of the proposed reve-
nue procedure required a central organiza-
tion to have one or more subordinate orga-
nizations under its general supervision or
control. Section 3.02(3) of the proposed
revenue procedure stated that the general
supervision requirement is satisfied if the
central organization (1) annually obtains,
reviews, and retains information on the
subordinate organization’s finances, activ-
ities, and compliance with annual filing
requirements (in accordance with section
7 of the proposed revenue procedure), and
(2) transmits written information to (or
otherwise educates) the subordinate orga-
nization about the requirements to main-
tain tax-exempt status under the applicable
paragraph of § 501(c), including annual
filing requirements (in accordance with
section 7 of the proposed revenue proce-
dure). Several commenters claimed that
the general supervision standard in the
proposed revenue procedure was ambig-
uous concerning the amount and type of
information a central organization must
obtain, review, and retain regarding its
subordinate organizations’ finances, activ-
ities, and compliance with filing require-
ments. One commenter requested more
specificity regarding the way a central
organization exercises general supervision
over subordinate organizations that file
Form 990-N, Electronic Notice (e-Post-
card) for Tax-Exempt Organizations Not
Required to File Form 990, or Form 990-
EZ, Short Form Return of Organization
Exempt From Income Tax.
To provide additional clarity and spec-
ificity, section 4.02(3)(b) of Rev. Proc.
2026-8 provides that a central organization
satisfies the requirement to obtain, review,
and retain information about a subordinate
organization by acquiring a copy of the
Form 990, Return of Organization Exempt
From Income Tax, or Form 990-EZ that
the subordinate organization filed with the
IRS. However, section 4.02(3)(b) of Rev.
Proc. 2026-8 also provides that obtaining
a copy of a Form 990-N will not satisfy
the central organization’s requirement
to obtain, review, and retain information
regarding the subordinate organization.
Consequently, a central organization
must obtain information about subordi-
nate organizations that file Form 990-N
in some other manner, such as by requir-
ing additional annual written information
from those subordinate organizations.
Section 4.02(3)(c) of Rev. Proc. 2026-8
provides a separate rule for subordinate
organizations that are not required to file
an annual information return or notice.
This new provision was added in response
to different comments and is addressed in
section III.07 of this notice.

January 20, 2026 370 Bulletin No. 2026–4
Commenters also asked about the infor-
mation a central organization must trans-
mit to subordinate organizations regarding
how to maintain tax-exempt status under
§ 501(c)(3). Section 4.02(3)(a)(ii) of Rev.
Proc. 2026-8, like section 3.02(3)(b) of the
proposed revenue procedure, is intention-
ally broad so as to afford a central orga-
nization flexibility in meeting the general
supervision standard; however, to provide
additional clarity, section 4.02(3)(a)(ii) of
Rev. Proc. 2026-8 specifies that electronic
delivery of such information is acceptable
and that the required information must be
transmitted to subordinate organizations
annually. Additionally, section 4.02(5) of
Rev. Proc. 2026-8 contains a new exam-
ple that illustrates that one way a central
organization can meet the standard in sec-
tion 4.02(3)(a)(ii) of Rev. Proc. 2026-8 is
to provide its subordinate organizations an
electronic link to the latest version of Pub-
lication 557, Tax-Exempt Status for Your
Organization.
Some commenters suggested that a
subordinate organization should only be
required to inform the central organization
that it has complied with its filing obli-
gations once every three years because
§ 6033(j)(1)(B) provides for the automatic
revocation of tax-exempt status of certain
organizations upon the failure to file a
required information return or notice for
three consecutive years. This suggestion is
not adopted in Rev. Proc. 2026-8 because
the Treasury Department and the IRS
believe that the requirement that a cen-
tral organization annually obtain, review,
and retain information on its subordinate
organizations helps ensure the subordinate
organizations are complying with their fil-
ing requirements.
.05 Control Standard.
Section 3.02(4) of the proposed reve-
nue procedure provided that a subordinate
organization is subject to a central orga-
nization’s control if (1) the central orga-
nization appoints a majority of the subor-
dinate organization’s officers, directors, or
trustees; or (2) a majority of the subordi-
nate organization’s officers, directors, or
trustees are officers, directors, or trustees
of the central organization. Some com-
menters claimed that this control standard
was overly rigid and that compliance with
it would be burdensome, particularly for
a central organization with numerous sub-
ordinate organizations. One commenter
asked that the final revenue procedure
consider alternative governance structures
that also demonstrate control by the cen-
tral organization, such as cases in which
the central organization must approve the
election of the subordinate organization’s
directors. Another commenter stated that
the proposed control standard was at odds
with principles of union democracy and
that it directly contradicts provisions of
the Labor-Management Reporting and
Disclosure Act
2
that require officers of
covered unions to be elected by a secret
ballot of members.
The Treasury Department and IRS
agree that the control standard should
not be rigid to the point of being burden-
some and should be generally compati-
ble with principles of union democracy
and alternative governance structures.
To provide additional flexibility to the
control standard, section 4.02(4)(e) of
Rev. Proc. 2026-8 adds a third way for
a central organization to establish con-
trol over a subordinate organization. The
central organization can establish control
over the subordinate organization using
a written agreement evidencing its con-
trol over the subordinate organization’s
activities and operations. Rev. Proc.
2026-8 does not set forth a specific level
of control that must be established in the
written agreement. Whether the written
agreement sufficiently establishes con-
trol depends on the facts and circum-
stances. This expansion of the control
standard should alleviate the concerns
expressed by commenters regarding
alternative governance structures and
the Labor-Management Reporting and
Disclosure Act. Specifically, the expan-
sion permits central organizations to use
a written agreement that describes an
alternative governance structure to estab-
lish control over subordinate organiza-
tions that use that alternative governance
structure. This expansion also permits a
central organization to establish control
over its subordinate organizations using a
written agreement addressing aspects of
the subordinate organization’s activities
and operations without interfering with
the election of union officers.
A commenter suggested that any refer-
ence in the control standard to “a major-
ity of officers, directors, or trustees” must
be limited to those officers, directors, and
trustees that have voting power because,
in the commenter’s view, voting power
evinces control. The Treasury Department
and the IRS generally agree with this
comment. Accordingly, section 4.02(4)
(a)-(d) of Rev. Proc. 2026-8 provides that
a subordinate organization is subject to
a central organization’s control if (1) the
central organization appoints the subor-
dinate organization’s directors or trust-
ees who possess a majority of the voting
power with respect to the subordinate
organization’s governance, (2) the central
organization appoints a majority of the
subordinate organization’s officers, (3)
the subordinate organization’s directors or
trustees possessing a majority of the vot-
ing power with respect to the subordinate
organization’s governance are directors
or trustees of the central organization, or
(4) a majority of the subordinate organi-
zation’s officers are officers of the central
organization.
.06 Use of Intermediate Subordi-
nate Organizations to Establish General
Supervision or Control.
Several commenters suggested that the
final revenue procedure allow a central
organization to exercise general supervi-
sion or control over subordinate organi-
zations through intermediate subordinate
organizations. The Treasury Department
and the IRS do not agree with these com-
ments. A central organization is directly
responsible for ensuring its subordi-
nate organizations are entitled to federal
tax-exempt status, and allowing a central
organization to establish general supervi-
sion or control through intermediate sub-
ordinate organizations would run the risk
of undermining this fundamental aspect of
the group exemption letter program. Fur-
ther, the use of intermediate subordinate
organizations would create administrative
complexities for the IRS in the event a
group exemption letter is the subject of an
examination.
2
Labor-Management Reporting and Disclosure Act of 1959, Public Law 86-257, 73 Stat. 519 (codified as amended in Title 29 of the United States Code).

Bulletin No. 2026–4 371 January 20, 2026
.07 Concerns by Religious Organiza-
tions Regarding General Supervision or
Control.
Several religious organizations
objected to the general supervision or
control standards in section 3.02(3) and
(4) of the proposed revenue procedure,
claiming the standards would impermissi-
bly interfere with their religious practices
because their religious beliefs require
self-governance and autonomy at the local
level. These commenters argued that the
proposed revenue procedure would pre-
vent them from participating in the group
exemption letter program, in violation of
the First Amendment and the Religious
Freedom Restoration Act.
3

In response to the comments from these
religious organizations, section 4.02(3)(c)
of Rev. Proc. 2026-8 provides that a cen-
tral organization does not have to annu-
ally obtain, review, and retain information
on a subordinate organization’s finances,
activities, and compliance with annual fil-
ing requirements if that subordinate orga-
nization is not required to file an annual
information return or notice. Under these
circumstances, a central organization sat-
isfies the general supervision standard in
section 4.02(3)(a) of Rev. Proc. 2026-8 by
annually transmitting written information
to, or otherwise educating, the subordi-
nate organization about the requirements
to maintain tax-exempt status under the
applicable paragraph of section 501(c),
including, but not limited to, annual fil-
ing requirements, if applicable. Section
4.02(5)(c) of Rev. Proc. 2026-8 adds an
example to further clarify this point. The
Treasury Department and the IRS believe
these commenters’ concerns are alleviated
by the aforementioned revisions to the
general supervision standard of section
4.02(3) of Rev. Proc. 2026-8, because they
can participate in the group exemption
letter program by satisfying the general
supervision standard, rather than the more
onerous control standard.
Some religious organizations objected
to the use of the term “subordinate orga-
nization,” stating that the term does not
accurately reflect their organizational
structure. Rev. Proc. 2026-8 continues to
use the term “subordinate organization”
because the group exemption letter pro-
gram has referred to organizations as sub-
ordinate organizations for many decades
and changing the term now would likely
cause confusion. The use of this nomen-
clature for purposes of the group exemp-
tion letter program does not have any
impact on the federal tax treatment of the
organizations that choose to participate in
the group exemption letter program.
.08 Matching Requirement for a Cen-
tral Organization Described in § 501(c).
Section 3.03(2)(a)(i) of the proposed
revenue procedure retained the “matching
requirement” found in Rev. Proc. 80-27,
which required all subordinate organi-
zations initially included in, or subse-
quently added to, a group exemption letter
to be described in the same paragraph of
§ 501(c). Section 3.03(2)(a)(ii) of the pro-
posed revenue procedure added an addi-
tional matching requirement that required
all subordinate organizations initially
included in, or subsequently added to, a
group exemption letter to be described
in the same paragraph of § 501(c) as the
central organization, including a central
organization that is described in § 501(c)
and is an instrumentality or an agency of
a political subdivision. Section 3.03(2)(a)
(iii) of the proposed revenue procedure
provided that this additional matching
requirement would not apply if the central
organization is an instrumentality or an
agency of a political subdivision but is not
described in § 501(c). Several comment-
ers expressed support for the additional
matching requirement, but others objected
to it.
Notice 2020-36 explained that requir-
ing subordinate organizations to be
described in the same paragraph of
§ 501(c) as their central organization was
intended to improve the central organiza-
tion’s ability to exercise general supervi-
sion or control over its subordinate orga-
nizations. Given the changes Rev. Proc.
2026-8 makes to other provisions of the
proposed revenue procedure, the Treasury
Department and the IRS have determined
that it is not necessary for subordinate
organizations to be described in the same
paragraph of § 501(c) as their central orga-
nization. Accordingly, section 4.03(2)(a)
of Rev. Proc. 2026-8 requires subordinate
organizations to be described in the same
paragraph of § 501(c) as one another, but
subordinate organizations are not required
to be described in the same paragraph of
§ 501(c) as their central organization.
.09 Foundation Classification Require-
ment.
Section 3.03(2)(b) of the proposed rev-
enue procedure provided that all subordi-
nate organizations described in § 501(c)
(3) that are initially included in, or sub-
sequently added to, a group exemption
letter must be classified as public charities
under the same paragraph of § 509(a),
unless an exception applies. Several com-
menters stated that this “foundation classi-
fication requirement” accomplished little,
due to the exceptions, and that it would
increase administrative burdens in some
instances. The Treasury Department and
the IRS agree with this comment. Accord-
ingly, Rev. Proc. 2026-8 does not include
a foundation classification requirement.
.10 Similar Purpose Requirement.
Section 3.03(2)(c) of the proposed
revenue procedure contained a “similar
purpose requirement” that required all
subordinate organizations under a group
exemption letter to have a primary pur-
pose that is described by the same National
Taxonomy of Exempt Entities (NTEE)
code. One commenter contended that the
requirement would place unnecessary
burdens on organizations and potentially
limit participation in the group exemption
letter program.
The Treasury Department and the IRS
have determined that the similar purpose
requirement contained in the proposed
revenue procedure would not facilitate a
central organization’s exercise of general
supervision or control over its subordinate
organizations as was originally intended.
Subordinate organizations under many
group exemption letters have differ-
ent purposes, and a central organization
would have a strong incentive to select
a NTEE code that describes a wide vari-
ety of purposes in order to comply with
a similar purpose requirement. Further-
more, a similar purpose requirement is
unnecessary because other provisions of
Rev. Proc. 2026-8 adequately facilitate
3
The Religious Freedom Restoration Act of 1993, Public Law 103-141, 107 Stat. 1488 (codified at 42 U.S.C. § 2000bb through 42 U.S.C. § 2000bb-4).

January 20, 2026 372 Bulletin No. 2026–4
general supervision or control by a cen-
tral organization. Accordingly, Rev. Proc.
2026-8 does not include a similar purpose
requirement.
.11 Uniform Governing Instrument
Requirement.
Section 3.03(2)(d) of the proposed rev-
enue procedure provided that all subordi-
nate organizations must adopt a uniform
governing instrument, such as, but not
limited to, a charter, trust indenture, arti-
cles of association, etc., and provided that
representative instruments are not accept-
able for this purpose. For group exemp-
tion letters including subordinate orga-
nizations described in § 501(c)(3) with
different purposes, the proposed revenue
procedure required the governing instru-
ment describing each distinct charitable,
educational, scientific, or other exempt
purpose to be a uniform governing instru-
ment.
Many commenters said that this “uni-
form governing instrument requirement”
was untenable, claiming that complete
uniformity is impossible in many circum-
stances because state law requirements for
governing instruments vary from state to
state. The commenters also said that sub-
ordinate organizations often have substan-
tially different functions in carrying out
the overarching purpose of a group, which
often requires governing instruments that
differ even though such differences do not
necessarily reflect differences in purpose.
Religious organizations raised concerns
that the uniform governing instrument
requirement would impermissibly inter-
fere with church governance. One com-
menter noted that the uniform governing
instrument requirement would be at odds
with principles of union democracy and
local decision making that are codified
in the Labor-Management Reporting and
Disclosures Act.
The Treasury Department and the IRS
agree that the uniform governing instru-
ment requirement in the proposed rev-
enue procedure would impose burdens
that outweigh its effectiveness in the
administration of the group exemption
letter program. Accordingly, Rev. Proc.
2026-8 does not include a uniform gov-
erning instrument requirement. Instead,
section 4.03(2)(b) of Rev. Proc. 2026-8
sets forth a uniform purpose statement
requirement that requires subordinate
organizations that share the same pur-
pose to have a uniform purpose state-
ment in their governing instruments (for
example, a charter, trust indenture, arti-
cles of association, etc.). If one or more
subordinate organizations covered by a
group exemption letter have a purpose
that is different from the purpose of other
subordinate organizations covered by the
letter, the subordinate organizations that
share a purpose must include the same
uniform purpose statement in their gov-
erning instruments. The uniform purpose
statement must generally describe the
purpose of the subordinate organizations.
The Treasury Department and the IRS
believe that, unlike the uniform govern-
ing instrument requirement in the pro-
posed revenue procedure, this uniform
purpose statement requirement addresses
commenters’ concerns about the varying
state laws regarding governing instru-
ments. The uniform purpose statement
requirement also allows subordinate
organizations to retain appropriate auton-
omy from the central organization, as
may be necessary for non-tax purposes.
Moreover, requiring subordinate organi-
zations to have a uniform purpose state-
ment helps central organizations ensure
that all subordinate organizations under
their general supervision or control have
a valid exempt purpose. The uniform pur-
pose statement requirement also reduces
the IRS’s administrative burden because
it enables more streamlined processing of
group applications.
.12 Annual Accounting Period Require-
ment.
Section 4.02(5) of Rev. Proc. 80-27
required subordinate organizations to be
on the same annual accounting period as
the central organization to be included in
a group return. While the proposed rev-
enue procedure did not clearly provide
this requirement, section 5.03(j) of the
proposed revenue procedure required a
central organization that submits a group
application to include a statement that
any subordinate organizations that will be
included in a group return will be on the
same annual accounting period as the cen-
tral organization. To make it clear that the
annual accounting period requirement in
Rev. Proc. 80-27 remains applicable, sec-
tion 4.03(2)(c) of Rev. Proc. 2026-8 sets
forth an annual accounting period require-
ment equivalent to section 4.02(5) of Rev.
Proc. 80-27.
.13 Exclusion of Revoked Organiza-
tions.
Under section 3.04(5) of the proposed
revenue procedure, an organization that
had its exemption automatically revoked
and that has not yet had its exemption
reinstated after filing an application for
reinstatement was ineligible to be a sub-
ordinate organization under a group
exemption letter until the IRS reinstated
the organization’s exemption. One com-
menter opined that this requirement is
unnecessary and overly burdensome and
suggested that a simplified procedure,
such as filing a Form 990-series informa-
tion return for the prior years, should be
sufficient for an automatically revoked
organization to join a group exemption
letter.
Allowing an organization that has
had its tax-exempt status automatically
revoked to regain tax-exempt status by
joining a group exemption letter would
violate § 6033(j)(2). That section requires
organizations that lose tax-exempt status
by automatic revocation to apply for rein-
statement to become tax-exempt again.
Accordingly, section 4.04(5) of Rev. Proc.
2026-8 retains the requirement in the pro-
posed revenue procedure that an organiza-
tion that loses tax-exempt status by auto-
matic revocation must be reinstated before
it is eligible to be a subordinate organiza-
tion. Further, section 9.07 of Rev. Proc.
2026-8, which discusses automatic revo-
cation, clarifies that an organization that
has its tax-exempt status automatically
revoked must file an application for rein-
statement to qualify for tax-exempt status
even if the organization was not originally
required to apply for tax-exempt status.
.14 Authorization for Initial Inclusion
or Subsequent Addition as a Subordinate
Organization.
Section 3.05(1) of the proposed reve-
nue procedure retained the requirement
from Rev. Proc. 80-27 that a subordinate
organization must authorize a central
organization in writing to include it in a
group application. Section 3.05(2) of the
proposed revenue procedure added that
this authorization must acknowledge that
the central organization may remove the
subordinate organization from the group
exemption letter if the subordinate orga-

Bulletin No. 2026–4 373 January 20, 2026
nization fails to comply with the require-
ments of the proposed revenue procedure.
4

Some commenters were concerned that
this new authorization requirement would
not accommodate subordinate organiza-
tions that executed an authorization that
satisfies Rev. Proc. 80-27 while waiting
for the IRS to resume accepting group
applications upon the publication of Rev.
Proc. 2026-8. These commenters asked
for a one-year transition period before the
new authorization requirement goes into
effect. Several commenters also suggested
that, if a subordinate organization had
been included in a group exemption letter
for more than five years when Rev. Proc.
2026-8 is published, the IRS should pre-
sume that such subordinate organization
provided the required authorization to the
central organization even if a copy cannot
be located.
Rev. Proc 2026-8 does not provide the
transition period requested by the com-
menters and does not adopt the presump-
tion for subordinate organizations that
have been included in a group exemption
letter for more than five years. If a sub-
ordinate organization executed an autho-
rization that does not include a right of
removal during the period when the IRS
was not accepting group applications, the
central organization must obtain a new
authorization from the subordinate organi-
zation. Moreover, if a central organization
cannot locate the required authorization
for a subordinate organization, it must
obtain a new authorization. The Trea-
sury Department and the IRS have deter-
mined that the small burden in obtaining
an authorization is justified because both
central organizations and subordinate
organizations must demonstrate compli-
ance with Rev. Proc. 2026-8 to receive the
administrative conveniences it affords.
Although Rev. Proc. 2026-8 does not
include any of the revisions requested by
commenters regarding the authorization
for initial inclusion or subsequent addition
to a group exemption letter as a subordi-
nate organization in section 3.05 of the
proposed revenue procedure, Rev. Proc.
2026-8 revises the authorization provi-
sion in the proposed revenue procedure
to require the authorization to permit the
central organization to remove the subor-
dinate organization with or without cause,
in accordance with the provisions of sec-
tion 8.02 of Rev. Proc. 2026-8. This revi-
sion to the authorization provision reflects
changes to the provisions of Rev. Proc.
2026-8 governing the removal of subordi-
nate organizations by a central organiza-
tion that are addressed in section III.17 of
this notice.
.15 Instructions for Submitting a Group
Application.
5
No comments were received regarding
the instructions for submitting a group
application contained in section 5 of the
proposed revenue procedure. However,
the Treasury Department and the IRS
have revised the instructions in the pro-
posed revenue procedure, which are con-
tained in section 6 of Rev. Proc. 2026-8, to
reflect changes to other provisions of the
proposed revenue procedure. Specifically,
section 6.04(1)(o) of Rev. Proc. 2026-8
provides that the IRS can issue guidance
requiring central organizations to pro-
vide additional information in a group
application, and section 6.04(3) of Rev.
Proc. 2026-8 requires a central organiza-
tion with a pending group application to
provide additional information to the IRS
correcting any inaccurate information or
representations in the pending group appli-
cation, even if the inaccuracies arise after
the application is submitted to the IRS.
These two new provisions will increase
the efficiency of the group exemption let-
ter program and improve the integrity of
data collected for purposes of oversight of
the group exemption letter program.
The Treasury Department and the IRS
also revised the instructions in the pro-
posed revenue procedure regarding the
method for submitting a group application.
Under section 6.02 of Rev. Proc. 2026-8,
group applications must be submitted
electronically on Form 8940 at www.
pay.gov, along with all information, doc-
umentation, and other materials required
by Form 8940 and its instructions, includ-
ing the appropriate user fee. The IRS may
change the procedures for the submission
of group applications through guidance
published in the Internal Revenue Bulletin
or in forms, instructions, publications, or
a posting on irs.gov issued with respect to
Rev. Proc. 2026-8.
.16 Information Required to Maintain
a Group Exemption Letter / Supplemental
Group Ruling Information.
Under section 6 of the proposed reve-
nue procedure, when a central organiza-
tion made a Supplemental Group Ruling
Information (SGRI) submission adding
a subordinate organization to its group
exemption letter, the central organization
was required to include certain informa-
tion in the submission, including a state-
ment that the information upon which
the group exemption letter is based is
applicable to the new subordinate organi-
zation in all material respects. The SGRI
submission was also required to include,
among other things, a detailed description
of changes in the purposes and activities
of subordinate organizations, as well as
the date of formation of any subordinate
organization that has changed its name
or address or is no longer included in the
group exemption letter.
One commenter stated that it might be
inappropriate to require a central organiza-
tion to report that the original information
upon which a group exemption is based is
applicable to a new subordinate organiza-
tion if the central organization reported
changes in the purposes or activities of the
group exemption in previous SGRI sub-
missions. In response, section 7.02(3)(b)
of Rev. Proc. 2026-8 now provides that a
central organization making an SGRI sub-
mission that adds a subordinate organi-
zation to its group exemption letter must
include a statement that the information
upon which the group exemption letter is
based, as updated by the current or previ-
ous SGRI submissions, is applicable to the
new subordinate organization in all mate-
rial respects.
One commenter asked that the final
revenue procedure provide a procedure
for a central organization to request
approval of any SGRI modifications the
central organization makes to the infor-
mation upon which its group exemption
is based. This commenter stated that such
4
The proposed revenue procedure and Rev. Proc. 2026-8 except preexisting subordinate organizations from this new authorization requirement.
5
A central organization’s submission to obtain a group exemption letter is referred to a “request for a group exemption letter” or a “group exemption letter request” in the proposed revenue
procedure and as a “group application” in Rev. Proc. 2026-8. For purposes of consistency, this notice uses the term “group application.”

January 20, 2026 374 Bulletin No. 2026–4
an approval procedure will help the cen-
tral organization ensure that its standards
for reviewing new subordinate organi-
zations remain acceptable to the IRS. At
this time, the Treasury Department and
the IRS decline to create a procedure to
approve group exemption letter modifica-
tions because such a procedure would be
inconsistent with the IRS’s general posi-
tion not to rule on modified activities of
tax-exempt organizations. See section
3.01(83) of Rev. Proc. 2026-3, 2026-1
I.R.B. 143 (the IRS will not issue letter
rulings or determination letters regarding
whether an organization is or continues to
be exempt from taxation under § 501(a)
as an organization described in §§ 501(c)
or 501(d), including whether changes in
an organization’s activities or operations
will affect or jeopardize the organization’s
tax-exempt status); section 3.02(7) of Rev.
Proc. 2026-5, 2026-1 I.R.B 258 (the IRS
will not issue a determination letter if an
organization recognized as tax-exempt
under § 501(c) requests a new determina-
tion letter confirming that the organization
continues to be recognized under the same
Code section). If the IRS’s position under
section 3.01(83) of Rev. Proc. 2026-3 (or
its successor), and section 3.02(7) of Rev.
Proc. 2026-5 (or its successor) changes,
the IRS may reconsider creating a proce-
dure to approve group exemption letter
modifications.
Another commenter took exception
to the proposed revenue procedure’s
requirement that a central organization’s
SGRI submission include descriptions of
all changes in the purposes and activities
of subordinate organizations. This com-
menter stated that the proposed reporting
requirement was overly broad, burden-
some, and unnecessary. The Treasury
Department and the IRS agree with the
commenter. Accordingly, section 7.02(1)
of Rev. Proc. 2026-8 contains the report-
ing requirements contained in Rev. Proc.
80-27, which only require information
regarding changes in the purposes, charac-
ter, or method of operation of subordinate
organizations.
A final commenter suggested that
SGRI submissions should not be required
to include the date of formation of a sub-
ordinate organization if the purpose of
the SGRI submission is to report a name
or address change or that the subordinate
organization is no longer part of the group
exemption letter. In response, section
7.02(3)(a) of Rev. Proc. 2026-8 provides
that a central organization is required to
report the date of formation or incorpo-
ration of a subordinate organization in an
SGRI submission only when it is adding
the subordinate organization to its group
exemption letter.
Rev. Proc. 2026-8 makes four addi-
tional changes to the SGRI provisions.
First, section 7.01 of Rev. Proc. 2026-8
continues to require a central organization
to submit its annual SGRI at least 30 days
before the close of its annual accounting
period but adds that a central organi-
zation may not submit its annual SGRI
more than 90 days before the close of its
annual accounting period. Second, section
7.02(2)(a)(iii) of Rev. Proc. 2026-8 pro-
vides that SGRI submissions must include
a list of subordinate organizations whose
tax-exempt status has been automatically
revoked. Third, under section 7.02(4) of
Rev. Proc. 2026-8, the IRS may spec-
ify additional information to be included
in SGRI submissions through published
guidance or another form of guidance
issued after Rev. Proc. 2026-8 is pub-
lished. Finally, under section 7.03, SGRI
submissions must be made electronically.
If the IRS has not published procedures
for the electronic submission of SGRI by
the publication date of Rev. Proc. 2026-
8, SGRI must be mailed to the address set
forth in section 7.03 of Rev. Proc. 2026-8.
The IRS may change the address and the
procedures for the submission of SGRI
through guidance published in the Inter-
nal Revenue Bulletin or in forms, instruc-
tions, publications, or a posting on irs.gov
issued with respect to Rev. Proc. 202-8.
These new provisions will increase the
efficiency of the group exemption letter
program and improve the integrity of data
collected for purposes of oversight of the
group exemption letter program.
.17 Termination of, or Removal from,
the Group Exemption Letter.
Section 8.01 of the proposed reve-
nue procedure provided that the IRS
may terminate a group exemption letter
with respect to all subordinate organi-
zations for, among other reasons, non-
compliance by the central organization
with the requirements of the proposed
revenue procedure, including lateness
in any SGRI submission and any fail-
ure to exercise general supervision or
control over one or more subordinate
organizations. One commenter claimed
that the proposed revenue procedure’s
provisions involving IRS termination of
a group exemption letter were too strict
and may result in “isolated errors” caus-
ing the termination of a group exemption
letter. The Treasury Department and the
IRS do not agree with this comment. The
termination provisions contained in the
proposed revenue procedure are neces-
sary to ensure that central organizations
and subordinate organizations remain in
compliance with the requirements of the
group exemption letter program. Further,
several of the proposed revenue proce-
dure’s requirements have been relaxed in
Rev. Proc. 2026-8, easing the burdens on
organizations participating in the group
exemption letter program and making it
less likely that errors resulting in an IRS
termination will occur. Additionally, IRS
termination under section 8.01(1) of Rev.
Proc. 2026-8 is discretionary and the IRS
can consider whether an error is isolated
when determining whether termination
is warranted. Accordingly, Rev. Proc.
2026-8 contains the termination provi-
sions as proposed.
The proposed revenue procedure pro-
vided that the IRS can also terminate a
group exemption letter with respect to all
subordinate organizations if more than half
of the subordinate organizations have had
their exemptions automatically revoked. A
commenter expressed concern about this
provision, noting that it is common for
small subordinate organizations to rely on
volunteers who may not understand their
filing responsibilities and that if one or
more of the subordinate organizations has
their exemption automatically revoked,
it puts the group exemption letter at risk
of termination. The Treasury Department
and the IRS disagree with this comment.
If more than half of the subordinate orga-
nizations have had their exemptions auto-
matically revoked, it is appropriate to ter-
minate the group exemption letter because
the Treasury Department and the IRS
do not believe the administrative conve-
niences afforded by the group exemption
letter program should be available when
the majority of underlying subordinate
organizations fail to satisfy their statutory

Bulletin No. 2026–4 375 January 20, 2026
filing requirements. Accordingly, section
8.01(1)(g) of Rev. Proc. 2026-8 retains the
IRS’s ability to terminate a group exemp-
tion letter if the tax-exempt status of more
than half of the subordinate organizations
under that group exemption letter is auto-
matically revoked for failure to satisfy
annual filing requirements.
Section 8.02 of the proposed revenue
procedure provided that a subordinate
organization will be removed from a group
exemption letter if (i) the central organiza-
tion notifies the IRS that the subordinate
organization will no longer be included
in the group exemption letter, (ii) the IRS
determines that the subordinate organiza-
tion is a type of entity disqualified from
being a subordinate organization, (iii) the
subordinate organization’s exemption is
automatically revoked, or (iv) the subor-
dinate organization fails to satisfy certain
requirements of the proposed revenue pro-
cedure. While commenters did not submit
any comments regarding these provisions,
Rev. Proc. 2026-8 contains a number of
revisions regarding when subordinate
organizations may be removed from a
group exemption letter.
Section 8.02(1) of Rev. Proc. 2026-8
sets forth the circumstances when a sub-
ordinate organization may be removed
from a group exemption letter by the IRS.
This provision has been revised to remove
references to the foundation classification
and similar purpose requirements because
those requirements have been eliminated
and are not contained in Rev. Proc. 2026-
8; however, a new provision contained in
section 8.02(1)(b) of Rev. Proc. 2026-8
permits the IRS to remove a subordinate
organization from a group exemption let-
ter for any failure to meet the requirements
of Rev. Proc. 2026-8 or other published
guidance relating to Rev. Proc. 2026-8,
other than the bases for removal set forth
in section 8.02(1)(a) of Rev. Proc. 2026-8.
Unlike removal under section 8.02(1)(a)
of Rev. Proc. 2026-8, and the correspond-
ing provisions of the proposed revenue
procedure, where removal is mandatory,
removal of a subordinate organization
from a group exemption letter under sec-
tion 8.02(1)(b) of Rev. Proc. 2026-8 is
discretionary. The Treasury Department
and the IRS believe this new provision is
appropriate because it provides flexibility
in considering the severity of the subor-
dinate organization’s failure to meet the
requirements under the group rulings pro-
gram.
Section 8.02(2) of Rev. Proc. 2026-8
governs when a central organization can
remove a subordinate organization from
a group exemption letter. As is the case
under Rev. Proc. 80-27, Rev. Proc. 2026-8
permits a central organization to remove
a subordinate organization without action
by the IRS. The central organization
accomplishes this removal by sending
an SGRI submission to the IRS just as
required by Rev. Proc. 80-27. Specifically,
section 8.02(2) of Rev. Proc. 2026-8 states
a subordinate organization ceases to be
included in a group exemption letter on
the date the central organization notifies
the IRS of the removal.
Section 8.02(2) of Rev. Proc. 2026-8
also clarifies that a central organization
may remove a subordinate organization
from its group exemption letter with or
without cause. The proposed revenue pro-
cedure was not clear whether a subordi-
nate organization can be removed without
cause. The Treasury Department and the
IRS believe that a central organization
should be able to remove a subordinate
organization from its group exemption
letter with or without cause, because that
ability affords the central organization
flexibility in overseeing the composition
of its group exemption letter.
Finally, section 8.02(3) of Rev. Proc.
2026-8 provides that a central organi-
zation must give a subordinate organi-
zation at least 30 days’ notice before the
subordinate organization can be removed
from a group exemption letter. The Trea-
sury Department and the IRS believe this
notice requirement affords subordinate
organizations opportunity to prepare for
removal from a group exemption letter.
.18 Effect of Non-Acceptance, Non-Is-
suance, Termination, or Removal.
Section 9 of the proposed revenue pro-
cedure addressed ways that organizations
may obtain recognition of tax-exempt sta-
tus if they are included as a subordinate
organization in a group application that is
not accepted or for which the IRS declines
to issue a group exemption letter. The pro-
posed revenue procedure also addressed
ways that organizations may regain recog-
nition of tax-exempt status if their group
exemption letter is terminated or if they
are removed from their group exemption
letter. Though commenters did not submit
any comments regarding these provisions
of the proposed revenue procedure, Rev.
Proc. 2026-8 reflects two clarifying revi-
sions.
Sections 9.05(2)(b) and (c) of Rev.
Proc. 2026-8 clarify that a subordinate
organization included in a group appli-
cation that is not accepted by the IRS,
included in a group application where the
IRS declines to issue a group exemption
letter, or included in a group exemption
letter that is terminated, may obtain rec-
ognition of its tax-exempt status by being
included in a group application by the
same central organization. If a subordi-
nate organization is removed from a group
exemption letter, it may not be included
in a group application by the same central
organization because central organiza-
tions are only permitted to have one group
exemption letter.
Section 9.05(2)(e) of Rev. Proc. 2026-8,
which is a provision that was not included
in the proposed revenue procedure, clar-
ifies that a subordinate organization may
obtain recognition of its exempt status
by being added back to a group exemp-
tion letter from which it was removed.
The proposed revenue procedure did not
provide for a subordinate organization to
obtain recognition of its tax-exempt status
in this manner.
.19 Effective Date of Exemption.
Under section 10 of the proposed rev-
enue procedure, a subordinate organiza-
tion added to a group exemption letter is
tax-exempt from the submission date of
the SGRI adding the organization to the
group exemption letter (unless the organi-
zation was already recognized as tax-ex-
empt or included in another group exemp-
tion letter, in which case the organization
retains its earlier effective date of exemp-
tion). The proposed revenue procedure
provided that a subordinate organization
included in a group application is tax-ex-
empt from the date of its formation if all
the subordinate organizations included in
the group application were formed within
27 months of the postmark date of the
group application. If any of the subordi-
nate organizations included in the group
application were formed more than 27
months before the postmark date of the
group application and were not previously

January 20, 2026 376 Bulletin No. 2026–4
recognized as tax-exempt or included in
another group exemption letter, then each
subordinate organization would be recog-
nized as tax-exempt from the postmark
date of the group application.
Commenters recommended revising
the rule regarding subordinate organiza-
tions added to a group exemption letter to
provide that a newly formed subordinate
organization is treated as tax-exempt from
its date of formation if the SGRI adding
the organization to the group exemption
letter was submitted within 27 months
of the organization’s date of formation.
According to these commenters, the rule
in the proposed revenue procedure is
unduly burdensome because it requires a
central organization to make an SGRI sub-
mission immediately upon the formation
of each new subordinate organization to
avoid any period during which the subor-
dinate organization is not tax-exempt.
The Treasury Department and the IRS
agree with this comment. Accordingly,
section 10.02 of Rev. Proc. 2026-8 pro-
vides that the effective date of exemption
for a subordinate organization that was
not previously recognized as tax-exempt
or included in another group exemption
letter and that is added to a group exemp-
tion letter within 27 months of its date of
formation is the organization’s date of for-
mation. The effective date of exemption
for a subordinate organization that was
not previously recognized as tax-exempt
or included in another group exemption
letter and that is added to a group exemp-
tion letter more than 27 months after its
date of formation will be the submission
date of the SGRI adding it to the group
exemption letter.
One commenter recommended revis-
ing the rule regarding the effective date
of exemption of subordinate organiza-
tions included in a group application
because it penalizes innocent subordi-
nate organizations if only one subordi-
nate organization was formed more than
27 months before the postmark date of
the group application and creates a disin-
centive for organizations to be included
in a group application. According to this
commenter, any organization formed
within 27 months of the postmark date
of the application should be treated as
tax-exempt from its date of formation
even if there are other subordinate orga-
nizations included in the group appli-
cation that were formed more than 27
months before the postmark date.
Rev. Proc. 2026-8 does not include
the suggested revision. Like the rules in
section 10 of the proposed revenue proce-
dure, section 10.01 of Rev. Proc. 2026-8
provides that if any subordinate organiza-
tion included in a group application was
formed more than 27 months before the
submission of the group application, the
effective date of exemption for all subor-
dinate organizations listed in the group
application will be the submission date of
the group application. However, section
10.01 of Rev. Proc. 2026-8 differs from
the corresponding provisions in Rev. Proc.
80-27 and the proposed revenue procedure
in that it provides that subordinate organi-
zations recognized as tax-exempt or that
are included in another group exemption
letter immediately prior to being included
in the group application retain their effec-
tive date of exemption. This revision
provides continuity for those subordi-
nate organizations by clarifying that they
retain their effective date of exemption.
The Treasury Department and the IRS
believe sections 10.01 and 10.02 of Rev.
Proc. 2026-8 provide central organiza-
tions with sufficient flexibility to achieve
the desired effective date of exemption for
each subordinate organization, while con-
tinuing to facilitate efficient processing of
group applications in the same manner as
the effective date rules contained in Rev.
Proc. 80-27.
.20 Preexisting Subordinate Organiza-
tion Rule and Transition Period.
The proposed revenue procedure con-
tained two provisions limiting its appli-
cability to preexisting group exemption
letters and preexisting subordinate orga-
nizations.
6
The first rule provided that
certain provisions of the proposed reve-
nue procedure do not apply to preexisting
subordinate organizations (PSO rule). The
second rule provided that certain provi-
sions of the proposed revenue procedure
do not apply during a one-year transition
period.
One commenter said the PSO rule
should be expanded to exclude preexisting
subordinate organizations from all require-
ments in the proposed revenue procedure
that are not contained in Rev. Proc. 80-27.
According to this commenter, the new
requirements could cause thousands of
organizations to be removed from preex-
isting group exemption letters and forced
to apply for tax-exempt status individu-
ally. Alternatively, the commenter rec-
ommended several variations of the PSO
rule providing a more limited application
of the rule regarding the matching, foun-
dation classification, and similar purpose
requirements. The Treasury Department
and IRS do not adopt any of the comment-
ers’ recommendations because they would
essentially require the IRS to operate the
group exemption letter program using two
vastly different sets of rules and doing so
would unduly burden the IRS. Further,
the commenter’s suggestions regarding
applying the PSO rule with respect to the
matching, foundation classification, and
similar purpose requirements are not dis-
cussed because these requirements have
been substantially revised in, or omitted
from, Rev. Proc. 2065-8, as explained in
sections III.08, III.09, and III.10 of this
notice.
A commenter requested that a preex-
isting subordinate organization that has
had its tax-exempt status automatically
revoked, but subsequently reinstated,
be considered a preexisting subordinate
organization for purposes of the PSO
rule. This commenter expressed concern
that providing otherwise would be unduly
burdensome for unsophisticated organiza-
tions because they are more likely to have
their exemption automatically revoked.
Under section 3.10 of Rev. Proc. 2026-
8, a preexisting subordinate organization
whose exemption has been automatically
revoked also loses its status as a preex-
isting subordinate organization. Rein-
statement of tax-exempt status, whether
retroactive or not, will not cause the orga-
nization to regain its status as a preexisting
subordinate organization. A subordinate
6
A “preexisting group exemption letter” is any group exemption letter in existence on the date Rev. Proc. 2026-8 is published in the Internal Revenue Bulletin. Rev. Proc. 2026-8, § 3.09. A
“preexisting subordinate organization” is any subordinate organization included in a preexisting group exemption letter on the date Rev. Proc. 2026-8 is published in the Internal Revenue
Bulletin. Id. at § 3.10.

Bulletin No. 2026–4 377 January 20, 2026
organization that has its tax-exempt status
automatically revoked is removed from a
group exemption letter pursuant to section
8.02(1)(a)(iii) of Rev. Proc. 2026-8. If the
organization is subsequently added back
to the group exemption letter, it will not
meet the definition of a preexisting subor-
dinate organization because it is added to
the group exemption letter after the pub-
lication date of Rev. Proc. 2026-8. While
this result may burden some subordinate
organizations, it is necessary for proper
administration of the group exemption
letter program and to ensure that orga-
nizations comply with their obligations
under Rev. Proc. 2026-8. To illustrate the
consequences where a preexisting sub-
ordinate organization is removed from a
group exemption letter, section 3.10 of
Rev. Proc. 2026-8 contains a revised defi-
nition of the term preexisting subordinate
organization and section 12.03(5) of Rev.
Proc. 2026-8 provides an example of the
effect of removal.
A commenter requested expansion of
the transition period from one year to three
years. The Treasury Department and the
IRS do not adopt this suggestion because
extending the transition period to three
years would require the IRS to adminis-
ter two group exemption letter programs
for the duration of the extended period,
which would unduly increase the adminis-
trative burden and decrease the efficiency
of the group exemption letter program.
Accordingly, the transition period in sec-
tion 12.02(2) of Rev. Proc. 2026-8 has
not been extended to three years. Instead,
section 12.02(2) of Rev. Proc. 2026-8
provides for a transition period ending on
January 22, 2027, rather than exactly one
year after publication of the revenue pro-
cedure. The Treasury Department and the
IRS made this revision to ease the admin-
istrative burden of the group exemption
letter program on the IRS.
Although Rev. Proc. 2026-8 does not
include any of the revisions to the PSO
rule and transition period specifically
requested by commenters, the Treasury
Department and the IRS revised these
rules after further considering their scope
and application. Under the proposed rev-
enue procedure, the general supervision
and control standards were not applicable
to preexisting subordinate organizations.
The Treasury Department and IRS do not
believe preexisting subordinate organi-
zations should be permanently excepted
from the new affiliation, supervision, and
control provisions contained in the pro-
posed revenue procedure. Instead, it is
more appropriate to require preexisting
subordinate organizations to comply with
the new provisions after the transition
period. Accordingly, sections 12.02(2)(a)
(iii) and 12.02(2)(d) of Rev. Proc. 2026-8
provide that the general supervision and
control provisions are covered by the
transition rule and apply to preexisting
group exemption letters and preexisting
subordinate organizations after a transi-
tion period ending on January 22, 2027.
This change facilitates uniformity in the
administration of the group exemption
letter program by limiting the time during
which the IRS must administer two dif-
ferent group exemption letter programs.
This change also benefits central organi-
zations with preexisting group exemption
letters by affording them time to ensure
that their relationships with their preex-
isting subordinate organizations comply
with Rev. Proc. 2026-8. In addition, the
proposed revenue procedure inadvertently
failed to include the affiliation provision
in the PSO rule or the transition period.
Sections 12.02(2)(a)(iii) and 12.02(2)(d)
of Rev. Proc. 2026-8 clarify that the affili-
ation provision also applies to preexisting
group exemption letters and preexisting
subordinate organizations after the transi-
tion period ending on January 22, 2027.
The PSO rule and transition period
in the proposed revenue procedure have
also been revised to conform with revi-
sions made to other provisions of the pro-
posed revenue procedure. For example,
the foundation classification requirement,
similar purpose requirement, and uniform
governing instrument requirement have
each been removed from the PSO rule, as
these requirements were eliminated from
the operative rules. In addition, the PSO
rule in section 12.02(3)(a) of Rev. Proc.
2026-8 provides that preexisting subordi-
nate organizations need not comply with
the uniform purpose statement require-
ment found in section 4.03(2)(b) of Rev.
Proc. 2026-8.
Although it appears that the applica-
tion of the PSO rule and transition period
to the matching requirement has been
revised as published in Rev. Proc. 2026-
8, the revisions are not substantive. The
PSO rule in the proposed revenue proce-
dure provided that the matching require-
ment did not apply to preexisting subor-
dinate organizations and did not draw a
distinction between the requirement that
subordinate organizations be described in
the same paragraph of § 501(c) as the cen-
tral organization and the requirement that
subordinate organizations be described in
the same paragraph of § 501(c) as other
subordinate organizations covered by the
group exemption letter. However, a sub-
sequent provision of the proposed revenue
procedure, separate from the transition
period of the proposed revenue procedure,
provided that central organizations with
a preexisting group exemption letter had
the duration of the transition period to
ensure that all subordinate organizations
were described in the same paragraph of
§ 501(c). Like the proposed revenue pro-
cedure, Rev. Proc. 2026-8 provides that
central organizations have the duration
of the transition period to comply with
the matching requirement obligating all
subordinate organizations covered by a
group exemption letter to be described in
the same paragraph of § 501(c); however,
this provision is clearly contained in the
transition period in section 12.02(2) of
Rev. Proc. 2026-8. As explained above in
section III.08 of this notice, the matching
requirement in Rev. Proc. 2026-8 does
not require subordinate organizations to
be described in the same paragraph of
§ 501(c) as the central organization, so
this requirement is not addressed in the
PSO rule or transition period provision.
Finally, the proposed revenue proce-
dure inadvertently excluded organizations
described in § 501(c)(29) from its PSO
rule. Accordingly, section 12.02(3)(c) of
Rev. Proc. 2026-8 includes organizations
described in § 501(c)(29) in the PSO rule.
.21 Declaratory Judgment Provisions
of § 7428.
Section 11 of the proposed revenue
procedure explained when the declara-
tory judgment provisions of § 7428 apply
in the context of group exemption letters.
The Treasury Department and IRS have
determined that it is more appropriate to
provide such guidance in a future update
to section 10 of Rev. Proc. 2026-5 (or its
successor), which explains when and how
a declaratory judgment proceeding under

January 20, 2026 378 Bulletin No. 2026–4
§ 7428 may be filed in the United States
Tax Court, the United States Court of Fed-
eral Claims, or the District Court of the
United States for the District of Columbia.
Section 11 of Rev. Proc. 2026-8 provides
information regarding whether a declara-
tory judgement action under § 7428 must
be filed by a controlling organization or a
subordinate organization.
.22 Reliance.
Section 12 of the proposed revenue pro-
cedure, which related to donor reliance on
a group exemption letter, explained how
donors could verify that contributions to
a subordinate organization are deductible
under § 170. A commenter suggested sev-
eral revisions to this provision to address
issues that are unique to subordinate orga-
nizations. As stated in Notice 2020-36, the
reliance section of the proposed revenue
procedure was intended to incorporate
previously issued guidance rather than
propose new policies and procedures.
After further consideration, the Treasury
Department and the IRS have excluded
the donor reliance provisions from Rev.
Proc. 2026-8 because the rules governing
donor reliance are already published in
Rev. Proc. 2018-32, 2018-23 I.R.B. 739.
Accordingly, Rev. Proc. 2026-8 does not
include the commenter’s suggested revi-
sions.
.23 Annual Filing Requirement / Dis-
closure of Group Applications and Group
Exemption Letter Requests.
Sections 7 and 13 of the proposed rev-
enue procedure addressed the filing of
group returns under § 6033 and the dis-
closure of group returns, group applica-
tions, and supporting documents under
§ 6104(a) and (d). These sections simply
incorporated information located in pre-
viously published guidance. After further
consideration, the Treasury Department
and the IRS have excluded these sections
from Rev. Proc. 2026-8.
SECTION IV. DRAFTING
INFORMATION
The principal author of this notice
is Seth Groman of the Office of Associ-
ate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). For further information regarding
this notice contact Seth Groman at (202)
317-5640 (not a toll-free call).
2026 Standard Mileage
Rates
Notice 2026-10
SECTION 1. PURPOSE
This notice provides the optional 2026
standard mileage rates for taxpayers to
use in computing the deductible costs
of operating an automobile for business,
charitable, medical, or moving expense
purposes. This notice also provides the
amount taxpayers must use in calculat-
ing reductions to basis for depreciation
taken under the business standard mileage
rate, and the maximum standard automo-
bile cost that may be used in computing
the allowance under a fixed and variable
rate (FAVR) plan. Additionally, this notice
provides the maximum fair market value
(FMV) of employer-provided automobiles
first made available to employees for per-
sonal use in calendar year 2026 for which
employers may use the fleet-average val-
uation rule in § 1.61-21(d)(5)(v) or the
vehicle cents-per-mile valuation rule in
§ 1.61-21(e).
1
SECTION 2. BACKGROUND
Rev. Proc. 2019-46, 2019-49 I.R.B.
1301, provides rules for computing the
deductible costs of operating an automo-
bile for business, charitable, medical, or
moving expense purposes, and for sub-
stantiating, under § 274(d) and § 1.274-
5, the amount of ordinary and necessary
business expenses of local transportation
or travel away from home. Taxpayers
using the standard mileage rates must
comply with Rev. Proc. 2019-46, except
to the extent the law has been specifically
changed by Public Law 119-21, 139 Stat.
72 (July 4, 2025), commonly known as the
One, Big, Beautiful Bill Act (OBBBA).
However, a taxpayer is not required to use
the substantiation methods described in
Rev. Proc. 2019-46, but instead may sub-
stantiate using actual allowable expense
amounts, if the taxpayer maintains ade-
quate records or other sufficient evidence.
An independent contractor conducts
an annual study for the Internal Revenue
Service of the fixed and variable costs
of operating an automobile to determine
the standard mileage rates for business,
medical, and moving use reflected in this
notice. The standard mileage rate for char-
itable use is set by § 170(i).
Longstanding regulations under § 61
provide special valuation rules for employ-
er-provided automobiles. The amount
that must be included in the employee’s
income and wages for the personal use
of an employer-provided automobile
generally is determined by reference to
the automobile’s FMV. If an employer
chooses to use a special valuation rule, the
special value is treated as the FMV of the
benefit for income tax and employment
tax purposes. Section 1.61-21(b)(4). Two
such special valuation rules, the fleet-av-
erage valuation rule and the vehicle cents-
per-mile valuation rule, are set forth in
§ 1.61-21(d)(5)(v) and § 1.61-21(e),
respectively. These two special valuation
rules are subject to limitations, including
that they may be used only in connection
with automobiles having values that do
not exceed a maximum amount set forth
in the regulations.
SECTION 3. STANDARD MILEAGE
RATES
The standard mileage rate for transpor-
tation or travel expenses for 2026 is 72.5
cents per mile for all miles of business
use (business standard mileage rate). See
section 4 of Rev. Proc. 2019-46. However,
§ 70110 of the OBBBA made permanent
the disallowance for all miscellaneous
itemized deductions that are subject to
the two-percent of adjusted gross income
floor under § 67, including unreimbursed
employee travel expenses. Thus, the
business standard mileage rate provided
in this notice cannot be used to claim an
itemized deduction for unreimbursed
employee travel expenses, except for cer-
1
Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code or the Income Tax Regulations (26 CFR part 1).

Bulletin No. 2026–4 379 January 20, 2026
tain educator expenses as described later.
However, deductions for expenses that are
deductible in determining adjusted gross
income remain allowable. For exam-
ple, members of a reserve component of
the Armed Forces of the United States
(Armed Forces), state or local government
officials paid in whole or in part on a fee
basis, and certain performing artists are
entitled to deduct unreimbursed employee
travel expenses as an adjustment to total
income on line 12 of Schedule 1 of Form
1040 (2025), U.S. Individual Income Tax
Return, not as an itemized deduction on
Schedule A of Form 1040 (2025), and
therefore may continue to use the busi-
ness standard mileage rate. See § 62(a)
(2). Similarly, eligible educators are also
entitled to deduct certain unreimbursed
employee travel expenses as an adjust-
ment to total income on line 11 of Sched-
ule 1 of Form 1040 (2025) up to the dollar
limit, but alternatively they may be enti-
tled to an itemized deduction on Schedule
A of Form 1040 for 2026. See §§ 62(a)(2)
(D) and 67(b)(13).
The standard mileage rate is 14 cents
per mile for use of an automobile in ren-
dering gratuitous services to a charitable
organization under § 170. See § 170(i);
see also section 5 of Rev. Proc. 2019-46.
The standard mileage rate for 2026 is
20.5 cents per mile for use of an auto-
mobile: (1) for medical care described
in § 213; or (2) as part of a move for
which the expenses are deductible
under § 217(g), as supplemented by
§ 217(k)(2). See also section 5 of Rev.
Proc. 2019-46. Section 70113(a) of the
OBBBA made permanent the disal-
lowance for the deduction for moving
expenses, except to the extent § 217(g)
applies, for taxable years beginning after
December 31, 2017, and § 70113(b) of
the OBBBA added a new provision that
included certain members of the intel-
ligence community within the scope of
§ 217(g). Accordingly, members of the
Armed Forces on active duty who move
pursuant to a military order and incident
to a permanent change of station to whom
§ 217(g) applies and members of the
intelligence community who move after
December 31, 2025, pursuant to a change
of assignment which requires relocation,
are permitted to deduct certain moving
expenses. Thus, except for taxpayers to
whom § 217(g) applies, including certain
members of the intelligence community,
the standard mileage rate provided in this
notice is not applicable for the use of an
automobile as part of a move.
SECTION 4. BASIS REDUCTION
AMOUNT
For automobiles a taxpayer uses for
business purposes, the portion of the
business standard mileage rate treated as
depreciation is 26 cents per mile for 2022,
28 cents per mile for 2023, 30 cents per
mile for 2024, 33 cents per mile for 2025,
and 35 cents per mile for 2026. See sec-
tion 4.04 of Rev. Proc. 2019-46.
SECTION 5. MAXIMUM STANDARD
AUTOMOBILE COST
For purposes of computing the allow-
ance under a FAVR plan, the standard
automobile cost may not exceed $61,700
for automobiles (including trucks and
vans). See section 6.02(6) of Rev. Proc.
2019-46.
SECTION 6. MAXIMUM VALUE
OF EMPLOYER-PROVIDED
AUTOMOBILES
For purposes of the fleet-average val-
uation rule in § 1.61-21(d)(5)(v) and the
vehicle cents-per-mile valuation rule in
§ 1.61-21(e), the maximum FMV of auto-
mobiles (including trucks and vans) first
made available to employees in calendar
year 2026 is $61,700.
SECTION 7. EFFECTIVE DATE
This notice is effective for: (1) deduct-
ible transportation expenses paid or
incurred on or after January 1, 2026; (2)
mileage allowances or reimbursements
paid to a charitable volunteer or a member
of the Armed Forces to whom § 217(g)
applies and certain members of the intel-
ligence community: (a) on or after Jan-
uary 1, 2026, and (b) for transportation
expenses the charitable volunteer or such
member of the Armed Forces or member
of the intelligence community pays or
incurs on or after January 1, 2026; and
(3) for purposes of the maximum FMV
of employer-provided automobiles for
which employers may use the fleet-av-
erage valuation rule in § 1.61-21(d)(5)
(v) or the vehicle cents-per-mile rule
in § 1.61-21(e), automobiles first made
available to employees for personal use
on or after January 1, 2026.
SECTION 8. EFFECT ON OTHER
DOCUMENTS
Notice 2025-5 is superseded.
DRAFTING INFORMATION
The principal author of this notice is
Christian Lagorio of the Office of Asso-
ciate Chief Counsel (Income Tax and
Accounting). For further information
on this notice regarding the use of an
employee-provided automobile, contact
Mr. Lagorio at (202) 317-7005 (not a
toll-free number). For further informa-
tion on this notice regarding the use of an
employer-provided automobile, contact
Stephanie Caden of the Office of Asso-
ciate Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes), at (202) 317-4774 (not a toll-free
number).

January 20, 2026 380 Bulletin No. 2026–4
26 CFR 601.201: Rulings and determination letters
(Also: §501; 1.501(a)-1)
Rev. Proc. 2026-8
TABLE OF CONTENTS
SECTION 1. PURPOSE
SECTION 2. BACKGROUND
SECTION 3. DEFINITIONS OF TERMS USED IN THIS REVENUE PROCEDURE
SECTION 4. REQUIREMENTS TO OBTAIN AND MAINTAIN A GROUP EXEMPTION LETTER
.01 General requirements
(1) Recognition of 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) Affiliated
(3) General supervision
(4) Control
(5) Example of general supervision when not all subordinate organizations are required to file annual information
returns or notices
.03 Organizations eligible for initial inclusion in a group application, or subsequent addition to a group exemption letter, as
subordinate organizations
(1) In general
(2) Requirements for initial inclusion in a group application, or subsequent addition to a group exemption letter, as a
subordinate organization
.04 Organizations not eligible for initial inclusion in a group application, or subsequent addition to a group exemption letter,
as subordinate organizations
.05 Continued inclusion in a group exemption letter
.06 Authorization for initial inclusion in a group application, or subsequent addition to a group exemption letter, as a
subordinate organization
(1) In general
(2) Removal
.07 Employer identification numbers (EINs)
.08 Annual information return or notice
SECTION 5. CONSIDERATION OF GROUP APPLICATIONS
.01
Group applications
.02 Non-acceptance
.03 Circumstances under which group exemption letters are not ordinarily issued
SECTION 6. INSTRUCTIONS FOR SUBMITTING A GROUP APPLICATION
.01 Group applications
.02 Electronic submission
.03 Information about the central organization
(1) In general
(2) Request concurrent with application
.04 Information about the subordinate organizations
(1) In general
(2) Additional requirements
(3) Updates to a pending group application
.05 New group application after the termination of a group exemption letter

Bulletin No. 2026–4 381 January 20, 2026
SECTION 7. INFORMATION REQUIRED TO MAINTAIN A GROUP EXEMPTION LETTER
.01 Information required annually
.02 Supplemental group ruling information (SGRI)
(1) Change in purpose, character, or method of operation
(2) Lists of certain changes
(3) Organizations to be added to the group exemption letter as subordinate organizations
(4) Other information
(5) No change
.03 Electronic submission
.04 Additional information
.05 Exception for central organizations that are churches or conventions or associations of churches
SECTION 8. TERMINATION OF, OR REMOVAL FROM, THE GROUP EXEMPTION LETTER
.01 Termination of the group exemption letter
(1) Termination by the IRS
(2) Termination by the central organization
.02 Removal from the group exemption letter
(1) Basis for removal by the IRS
(2) Basis for removal by the central organization
(3)
Notification
(4) 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
.03 Effect of removal
.04 Churches and conventions or associations of churches
.05 Subsequent recognition of exemption
(1) In general
(2) Organization required to file an application
(3) Organization not required to file an application
.06 Subsequent exemption without recognition from the IRS
.07 Automatic revocation
SECTION 10. EFFECTIVE DATE OF EXEMPTION
.01 Initial inclusion
.02 Subsequent addition
.03 Non-acceptance, non-issuance, termination, or removal
(1) In general
(2) Organizations filing an application
(3) Organizations being included in a new group application
(4) Organizations being added to a group exemption letter
(5) Automatic revocation
SECTION 11. DECLARATORY JUDGMENT PROVISIONS OF § 7428
.01 In general
.02 Who must file
SECTION 12. APPLICABILITY
.01 New group exemption letters
.02 Preexisting group exemption letters
(1)
In general
(2) Transition period for certain requirements applicable to preexisting group exemption letters and preexisting
subordinate organizations
(3) Certain requirements not applicable to preexisting subordinate organizations

January 20, 2026 382 Bulletin No. 2026–4
.03 Examples
(1) Example 1. Two preexisting group exemption letters for subordinate organizations described in different
paragraphs of § 501(c)
(2) Example 2. One preexisting group exemption letter with no subordinate organizations
(3) Example 3. One preexisting group exemption letter with subordinate organizations described in different
paragraphs of § 501(c)
(4) Example 4. One preexisting group exemption letter with preexisting subordinate organizations described in the
same paragraph of § 501(c)
(5) Example 5. Removal of a preexisting subordinate organization from a preexisting group exemption letter
SECTION 13. PAPERWORK REDUCTION ACT
SECTION 14. EFFECT ON OTHER REVENUE PROCEDURES
SECTION 15. EFFECTIVE DATE
SECTION 16. DRAFTING INFORMATION
SECTION 1. PURPOSE
This revenue procedure modifies and
supersedes 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 to obtain recognition
of exemption from federal income tax on
a group basis for organizations described
in § 501(c) of the Internal Revenue Code
(Code)
1
that are affiliated with and under
the general supervision or control of a
central organization. This revenue proce-
dure relieves each subordinate organiza-
tion included in a group exemption letter
from filing its own application for recog-
nition of exemption. This revenue proce-
dure also sets forth updated procedures a
central organization must follow to main-
tain a group exemption letter.
SECTION 2. BACKGROUND
.01 Section 508 provides special rules
with respect to organizations described in
§ 501(c)(3), including the general require-
ment in § 508(a) that organizations must
notify the Secretary of the Treasury or the
Secretary’s delegate (Secretary) that they
are applying for recognition of § 501(c)
(3) status. Section 505 provides additional
requirements for organizations described
in § 501(c)(9) or (17), including the gen-
eral requirement in § 505(c) that organiza-
tions must notify the Secretary that they
are applying for recognition of exemp-
tion under § 501(c)(9) or (17). Sections
1.508-1(a)(1) and 1.505(c)-1T provide
additional information regarding the way
the notice required under §§ 508(a) and
505(c) is given to the Internal Revenue
Service (IRS). Organizations described
in other paragraphs of § 501(c), such as
social welfare organizations described in
§ 501(c)(4), may, but are not required to,
apply for recognition of exemption. How-
ever, § 506 generally requires an organi-
zation described in § 501(c)(4) to notify
the Secretary, in the manner prescribed in
§ 1.506-1, of the organization’s intent to
operate as such no later than 60 days after
the organization is established.
.02 Section 508(c)(2)(B) permits the
Secretary, by regulation, to except organi-
zations from the § 508(a) notice require-
ment if the Secretary determines that
full compliance is not necessary for the
efficient administration of the provisions
relating to private foundations.
.03 Section 1.508-1(a)(3)(i) provides
that the § 508(a) notice requirement does
not apply to specific types of organiza-
tions, including subordinate organizations
included in a group exemption letter.
.04 Rev. Proc. 68-13, 1968-1 C.B. 764,
superseded by Rev. Proc. 72-41, 1972-2
C.B. 820, Rev. Proc. 77-38, 1977-2 C.B.
571, and Rev. Proc. 80-27, set forth the
first published procedures for obtaining
recognition of exemption from federal
income tax on a group basis for organi-
zations described in § 501(c). The most
recent guidance regarding group exemp-
tion letters is set forth in Rev. Proc. 80-27,
as modified by Rev. Proc. 96-40.
.05 Rev. Proc. 2018-32, 2018-23 I.R.B.
739, sets forth the extent to which grant-
ors and contributors may rely on the list-
ing of a central organization in IRS data-
bases of organizations eligible to receive
tax-deductible contributions under § 170,
for purposes of determining whether the
grants or contributions to the organization
may be deductible under § 170.
.06 In Notice 2020-36, 2020-21 I.R.B.
840, the Department of the Treasury (Trea-
sury Department) and the IRS invited
comments regarding a proposed revenue
procedure that, if finalized, would modify
and supersede Rev. Proc. 80-27 by setting
forth updated procedures for obtaining
recognition of exemption from federal
income tax on a group basis for subordi-
nate organizations described in § 501(c),
including transition relief for existing
organizations. The Treasury Department
and the IRS received 29 comments in
response to Notice 2020-36.
.07 After considering the comments
received in response to Notice 2020-36,
the Treasury Department and the IRS
issue this revenue procedure to reduce the
administrative burden and increase the
efficiency of the group exemption letter
program, improve the integrity of data
1
Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax Regulations (26 CFR part 1).

Bulletin No. 2026–4 383 January 20, 2026
collected for purposes of oversight of the
group exemption letter program, increase
the transparency of the group exemption
letter program, and increase compliance
by central organizations and subordinate
organizations with requirements of the
group exemption letter program. This rev-
enue procedure also provides greater cer-
tainty and clarity to central organizations
and subordinate organizations under exist-
ing group exemption letters and organiza-
tions that file an application for a group
exemption letter after the date of publica-
tion of this revenue procedure in the Inter-
nal Revenue Bulletin (publication date).
.08 Notice 2020-36 provides that the
IRS will not accept applications for group
exemption letters on or after June 17,
2020, until publication of the final reve-
nue procedure or other guidance in the
Internal Revenue Bulletin. The IRS will
resume accepting applications for group
exemption letters after January 20, 2026,
the publication date.
SECTION 3. DEFINITIONS OF
TERMS USED IN THIS REVENUE
PROCEDURE
.01 The term “annual information
return or notice” means the return or
notice an organization must file annually
under § 6033(a) or (i) of the Code (that is,
Form 990, Return of Organization Exempt
From Income Tax; Form 990-EZ, Short
Form Return of Organization Exempt
From Income Tax; Form 990-N, Elec-
tronic Notice (e-Postcard) for Tax-Exempt
Organizations Not Required to File Form
990 or Form 990-EZ; or, in the context
of a central organization that is a private
foundation, Form 990-PF, Return of Pri-
vate Foundation).
.02 The term “application” means a
request for recognition of exemption from
federal income tax under § 501 in the
manner described by Rev. Proc. 2026-5,
2026-1 I.R.B. 258 (or its successor).
.03 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. 2026-5 (or its successor), after
an organization’s exemption has been
automatically revoked.
.04 The term “automatically revoked”
means, with respect to an organization, the
revocation of the organization’s exemp-
tion by operation of § 6033(j) for failure to
file an annual information return or notice
for three consecutive years.
.05 The term “central organization”
means an organization described in
§ 501(c), a political subdivision or integral
part of a political subdivision, or an instru-
mentality of a political subdivision that
has one or more subordinate organizations
under its general supervision or control.
.06 The term “a church or a convention
or association of churches” has the same
meaning as the term in § 170(b)(1)(A)(i).
.07 The term “group application”
means an application for a group exemp-
tion letter.
.08 The term “group exemption let-
ter” means a letter issued by the IRS to
a central organization recognizing the
exemption from federal income tax on a
group basis for subordinate organizations
described in § 501(c).
.09 The term “preexisting group
exemption letter” means a group exemp-
tion letter in existence on the publication
date.
.10 The term “preexisting subordinate
organization” means a subordinate orga-
nization included in a preexisting group
exemption letter on the publication date.
If a preexisting subordinate organization
is removed from a group exemption let-
ter and is subsequently added back to the
group exemption letter from which it was
removed, it will not be a preexisting sub-
ordinate organization.
.11 The term “submission date” means-
(1) In the case of any document filed
on paper with the IRS, (a) the postmark
date applied by the United States Postal
Service, or (b) for any document given
to a designated delivery service (as such
term is defined in § 7502(f)(2)) for deliv-
ery, the date that is recorded electronically
to a database by the designated delivery
service or marked on the cover of the doc-
ument by the designated delivery service;
and
(2) In the case of any document filed
electronically with the IRS, the date of
transmittal to the IRS.
.12 The term “subordinate organiza-
tion” means an organization described in
§ 501(c) that is a chapter, local, post, or
unit of a central organization. It must have
a governing instrument (for example, a
charter, trust indenture, articles of associ-
ation, etc.), whether or not it is incorpo-
rated.
.13 The term “supplemental group rul-
ing information” or “SGRI” means the
information described in section 7.02 of
this revenue procedure that a central orga-
nization must submit annually to the IRS
about its subordinate organizations unless
an exception applies.
SECTION 4. REQUIREMENTS TO
OBTAIN AND MAINTAIN A GROUP
EXEMPTION LETTER
.01 General requirements.
(1) Recognition of exemption. On or
before the date it files a group applica-
tion, a central organization described in
§ 501(c) must either (a) be recognized
by the IRS as tax-exempt, (b) have filed
an application, or (c) in the case of a cen-
tral organization that has had its exemp-
tion automatically revoked, have filed an
application for reinstatement.
(2) Minimum number of subordinate
organizations. A central organization must
have at least five subordinate organiza-
tions to obtain a group exemption letter,
and it must have at least one subordinate
organization to maintain the group exemp-
tion letter thereafter (except as provided in
section 12.02(2)(a)(i) of this revenue pro-
cedure, 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 12.02(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. Each subordinate orga-
nization initially included in a group
application, or subsequently added to a
group exemption letter, must be (1) affil-
iated with the central organization, and
(2) subject to its general supervision or
control, as such terms are defined in this
section 4.02 (except as provided in section
12.02(2)(a)(iii) of this revenue procedure,
which provides a transition period for
preexisting subordinate organizations).
The terms “affiliated,” “general supervi-
sion,” and “control,” as used in this reve-

January 20, 2026 384 Bulletin No. 2026–4
nue procedure, apply only for purposes of
this revenue procedure and § 1.6033-2(d)
(relating to group returns).
(2) Affiliated. A subordinate organiza-
tion’s affiliation with the central organiza-
tion is demonstrated by facts and circum-
stances showing that it is a chapter, local,
post, or unit of the central organization.
For example, a subordinate organization
may demonstrate its affiliation with a cen-
tral organization by (a) the inclusion of its
information on a group return described in
§ 1.6033-2(d) that includes the four-digit
group exemption number (GEN); (b) the
current inclusion of the subordinate orga-
nization in a directory of subordinate orga-
nizations updated annually by the central
organization; or (c) in the case of a sub-
ordinate organization that is a church or
a convention or association of churches,
the sharing of common religious bonds or
convictions with the central organization.
(3) General supervision.
(a) In general. A subordinate organiza-
tion is subject to the general supervision
of a central organization if the central
organization:
(i) Annually obtains, reviews, and
retains information on the subordinate
organization’s finances, activities, and
compliance with annual filing require-
ments; and
(ii) Annually transmits (including elec-
tronically) written information to, or oth-
erwise educates, the subordinate organi-
zation about the requirements to maintain
tax-exempt status under the applicable
paragraph of § 501(c), including, but not
limited to, annual filing requirements, if
applicable.
(b) Form 990 or Form 990-EZ. A cen-
tral organization may obtain the informa-
tion regarding a subordinate organization
required by section 4.02(3)(a)(i) of this
revenue procedure by obtaining a copy of
the subordinate organization’s Form 990
or Form 990-EZ. A copy of the subordi-
nate organization’s Form 990-N is not suf-
ficient to satisfy the requirement to obtain
the information regarding the subordinate
organization required by section 4.02(3)
(a)(i) of this revenue procedure.
(c) Exception for subordinate organi-
zations not required to file annual infor-
mation returns or notices. If a subordi-
nate organization is not required to file
an annual information return or notice,
a central organization may, but is not
required to, satisfy section 4.02(3)(a)(i) of
this revenue procedure regarding the sub-
ordinate organization. See section 4.02(5)
of this revenue procedure for an example
illustrating the operation of this section
4.02(3).
(4) Control. A subordinate organization
is subject to the control of a central orga-
nization if:
(a) The central organization appoints
the subordinate organization’s directors or
trustees who possess a majority of the vot-
ing power with respect to the subordinate
organization’s governance;
(b) The central organization appoints a
majority of the subordinate organization’s
officers;
(c) The subordinate organization’s
directors or trustees possessing a major-
ity of the voting power with respect to the
subordinate organization’s governance are
directors or trustees of the central organi-
zation;
(d) A majority of the subordinate orga-
nization’s officers are officers of the cen-
tral organization; or
(e) The central organization and the
subordinate organization enter into a writ-
ten agreement that evidences the central
organization’s control over the subordi-
nate organization’s activities and opera-
tions. For example, the written agreement
may contain provisions that describe an
alternative governance structure in which
the central organization must approve the
election of the subordinate organization’s
directors or has the right to remove direc-
tors at any time with or without cause.
Alternatively, the central organization
may enter into a management agreement
with the subordinate organization giving it
direct control over the subordinate organi-
zation’s activities and operations.
(5) Example of general supervision
when not all subordinate organizations
are required to file annual information
returns or notices.
(a) Central organization A is described
in § 501(c)(3). A has a group exemp-
tion letter for subordinate organizations
described in § 501(c)(3) that are organized
and operated for charitable, educational,
and religious purposes. A is a church
and the subordinate organizations are
churches, schools (below college level),
and hospitals.
(b) A exercises general supervision
over A’s subordinate organizations that are
hospitals by annually obtaining, review-
ing, and retaining copies of those subor-
dinate organizations’ annual information
returns and by annually providing each
hospital an electronic link to the current
version of Publication 557, Tax-Exempt
Status for Your Organization, available on
irs.gov, which provides information about
the requirements to maintain tax-exempt
status under § 501(c)(3) and annual filing
requirements.
(c) A exercises general supervision
over A’s subordinate organizations that
are churches and schools by annually pro-
viding each church and school an elec-
tronic link to the current version of Pub-
lication 1828, Tax Guide for Churches &
Religious Organizations, available on irs.
gov, which provides information about the
requirements to maintain tax-exempt sta-
tus under § 501(c)(3). A is not required to
annually obtain, review, or retain informa-
tion on the finances, activities, and com-
pliance with annual filing requirements
of the subordinate organizations that are
churches or schools because those subor-
dinate organizations are not required to
file annual information returns or notices
pursuant to § 1.6033-2(g)(1)(i).
.03 Organizations eligible for initial
inclusion in a group application, or subse-
quent addition to a group exemption letter,
as subordinate organizations.
(1) In general. An organization
described in § 501(c) is eligible for initial
inclusion in a group application, or subse-
quent addition to a group exemption letter,
as a subordinate organization if it meets
the requirements of section 4.03(2) of this
revenue procedure and is not described in
section 4.04 of this revenue procedure.
(2) Requirements for initial inclusion
in a group application, or subsequent
addition to a group exemption letter, as a
subordinate organization. In addition to
being affiliated with the central organiza-
tion and subject to its general supervision
or control, all subordinate organizations
initially included in a group application,
or subsequently added to a group exemp-
tion letter, must meet the requirements of
this section 4.03(2) (except as provided in
sections 12.02(2) and 12.02(3) of this rev-
enue procedure, regarding requirements
applicable to preexisting subordinate

Bulletin No. 2026–4 385 January 20, 2026
organizations after a transition period and
requirements not applicable to preexisting
subordinate organizations).
(a) Matching requirement. All subordi-
nate organizations under a group exemp-
tion letter must be described in the same
paragraph of § 501(c). Subordinate orga-
nizations are not required to be described
in the same paragraph of § 501(c) as the
central organization.
(b) Uniform purpose statement require-
ment. Subordinate organizations that
share the same purpose must have a uni-
form purpose statement in their governing
instruments (for example, a charter, trust
indenture, articles of association, etc.).
If one or more subordinate organizations
covered by a group exemption letter have
a purpose that is different from the purpose
of other subordinate organizations cov-
ered by the letter, the subordinate organi-
zations that share a purpose must include
the same uniform purpose statement in
their governing instruments. For exam-
ple, if a group exemption letter includes
subordinate organizations that are schools
and hospitals, the subordinate organiza-
tions that are schools must include the
same uniform purpose statement in their
governing instruments and the subordi-
nate organizations that are hospitals must
include the same uniform purpose state-
ment in their governing instruments. The
uniform purpose statement must generally
describe the purpose of the subordinate
organizations.
(c) Annual accounting period require-
ment. Subordinate organizations included
on a group return filed by the central orga-
nization on behalf of those subordinate
organizations must be on the same annual
accounting period as the central organiza-
tion (see § 1.6033-2(d) for information on
filing group returns).
.04 Organizations not eligible for ini-
tial inclusion in a group application, or
subsequent addition to a group exemption
letter, as subordinate organizations. The
following organizations cannot be initially
included in a group application, or subse-
quently added to a group exemption letter,
as subordinate organizations:
(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, pursuant to § 509(a)(3)(B)
(iii), is operated in connection with one or
more organizations described in § 509(a)
(1) or (2) (that is, an organization classi-
fied as a Type III supporting organization
under § 509(a)(3) and § 1.509(a)-4(i));
(4) A qualified nonprofit health insur-
ance issuer described in § 501(c)(29); and
(5) An organization that has had its
exemption automatically revoked and that
has not had its exemption reinstated after
filing an application for reinstatement.
.05 Continued inclusion in a group
exemption letter. A subordinate organiza-
tion initially included in a group appli-
cation, or subsequently added to a group
exemption letter, must continue to satisfy
sections 4.02, 4.03, and 4.04 of this rev-
enue procedure to remain a subordinate
organization under the group exemption
letter.
.06 Authorization for initial inclusion
in a group application, or subsequent
addition to a group exemption letter, as a
subordinate organization.
(1) In general. A subordinate organiza-
tion must authorize the central organiza-
tion to include the subordinate organiza-
tion in a group application or to add the
subordinate organization to an existing
group exemption letter. This authorization
must be in writing, and it must be signed
by an officer of the subordinate organiza-
tion with personal knowledge of the facts
and with authority to legally bind the sub-
ordinate organization.
(2) Removal. The authorization
described in this section 4.06 must
acknowledge that the central organization
may remove the subordinate organization
from the group exemption letter with or
without cause, in accordance with section
8.02(2) of this revenue procedure.
.07 Employer identification numbers
(EINs). A central organization, and each
subordinate organization, must have its
own EIN. The central organization must
obtain an EIN prior to filing its applica-
tion, and each subordinate organization
(or the central organization on a subor-
dinate organization’s behalf) must obtain
an EIN prior to its initial inclusion in a
group application or subsequent addition
to a group exemption letter. If, pursuant
to § 1.6033-2(d), a central organization
elects to file a group return for two or
more subordinate organizations, the cen-
tral organization must obtain an EIN (sep-
arate from the central organization’s EIN)
that is issued solely for the purpose of the
group return.
.08 Annual information return or
notice. A central organization generally
must file its own annual information return
or notice unless an exception applies. Each
subordinate organization initially included
in a group application, or subsequently
added to a group exemption letter, gener-
ally must also file an annual information
return or notice or have its information
included in a group return described in
§ 1.6033-2(d) filed by the central organi-
zation unless an exception applies.
SECTION 5. CONSIDERATION OF
GROUP APPLICATIONS
.01 Group applications. The IRS will
consider group applications that meet the
requirements of section 6 of this revenue
procedure.
.02 Non-acceptance. A group appli-
cation that is missing any information
required by section 6 of this revenue pro-
cedure or Rev. Proc. 2026-5 (or its succes-
sor) will be deemed incomplete and will
not be accepted for processing by the IRS.
.03 Circumstances under which group
exemption letters are not ordinarily
issued. The IRS may decline to issue a
group exemption letter if it is not in the
interest of sound tax administration. For
example, the IRS may decline to issue a
group exemption letter if the activities
described in the group application involve
complex facts and circumstances that are
more appropriately evaluated on an orga-
nization-by-organization basis.
SECTION 6. INSTRUCTIONS
FOR SUBMITTING A GROUP
APPLICATION
.01 Group applications. A group appli-
cation must meet the requirements of this
section 6. A subordinate organization
included in a group application should
not apply separately for recognition of
exemption (except in the circumstances
described in section 9 of this revenue
procedure, regarding the effect of non-ac-
ceptance, non-issuance, termination, or
removal).

January 20, 2026 386 Bulletin No. 2026–4
.02 Electronic submission. Group
applications must be submitted electron-
ically on Form 8940 at www.pay.gov,
along with all information, documenta-
tion, and other materials required by Form
8940 and the instructions thereto, includ-
ing the appropriate user fee. The IRS may
change the procedures for the submission
of group applications through guidance
published in the Internal Revenue Bulletin
or in forms, instructions, publications, or
a posting on irs.gov issued with respect to
this revenue procedure.
.03 Information about the central orga-
nization.
(1) In general. A central organization
must include the following information in
its group application:
(a) The central organization’s name,
address, and EIN; and
(b) Information establishing that it is a
central organization described in section
3.05 of this revenue procedure.
(2) Request concurrent with application.
A central organization described in § 501(c)
that has not obtained recognition of exemp-
tion at the time it files a group application
may submit the group application concur-
rently with its own application, or, in the
case of a central organization that has had
its exemption automatically revoked, with
its application for reinstatement (see section
4.02(7)(a) of Rev. Proc. 2026-5 (or corre-
sponding section(s) of its successor)).
.04 Information about the subordinate
organizations.
(1) In general. A central organization
must include the following information
and representations regarding the subordi-
nate organizations in its group application:
(a) The name, mailing address, EIN,
and date of formation or incorporation
of each subordinate organization to be
included in the group exemption letter (a
current directory of subordinate organi-
zations may be furnished if the directory
includes the required information);
(b) A representation that each subordi-
nate organization is affiliated with the cen-
tral organization and subject to its general
supervision or control;
(c) A representation that the subordi-
nate organizations are all described in the
same paragraph of § 501(c);
(d) The paragraph of § 501(c) under
which the subordinate organizations are
or will be described;
(e) A representation that no subordinate
organization is organized under the laws
of a foreign country;
(f) If the subordinate organizations
included in the group application are
described in § 501(c)(3), a representation
that no subordinate organization is a pri-
vate foundation under § 509(a) or a Type
III supporting organization under § 509(a)
(3) and § 1.509(a)-4(i);
(g) A representation that no subordinate
organization is a qualified nonprofit health
insurance issuer described in § 501(c)(29);
(h) A representation that no subordi-
nate organization (i) has had its exemption
automatically revoked and (ii) not had its
exemption reinstated after filing an appli-
cation for reinstatement;
(i) If the subordinate organizations are
described in § 501(c)(3) and classified
as public charities, the paragraph(s) of
§§ 509(a) and 170(b)(1)(A) (if applicable)
under which they are classified;
(j) A representation that each subordi-
nate organization sharing the same pur-
pose has adopted a uniform purpose state-
ment (as described in section 4.03(2)(b)
of this revenue procedure) as a part of its
governing instrument;
(k) The text of the uniform purpose
statement(s) adopted by the subordinate
organizations sharing the same purpose as
part of their governing instruments;
(l) A detailed description of each sub-
ordinate organization’s purpose(s) and
activities, including the sources of its
receipts and the nature of its expenditures;
(m) A representation that each subor-
dinate organization has furnished the cen-
tral organization the written authorization
described in section 4.06 of this revenue
procedure;
(n) A representation confirming that all
subordinate organizations were organized
within 27 months of the submission date
of the group application, or, if any sub-
ordinate organizations were organized
more than 27 months before the submis-
sion date, a statement that all subordinate
organizations, other than subordinate
organizations recognized by the IRS as
being described in § 501(c) or included in
another group exemption letter immedi-
ately prior to being included in the group
application, agree to be recognized as
exempt from the submission date of the
group application;
(o) If the central organization will file
a group return on behalf of two or more
subordinate organizations, a representa-
tion that the subordinate organizations
included on such group return are (or will
be) on the same annual accounting period
as the central organization (see § 1.6033-
2(d) for information on filing group
returns); and
(p) Such additional information as
the IRS may specify in published guid-
ance in the Internal Revenue Bulletin or
in other guidance, such as forms, instruc-
tions, publications, or a posting on irs.
gov issued with respect to this revenue
procedure.
(2) Additional requirements. A central
organization with subordinate organiza-
tions that are private schools, charitable
hospitals, or social welfare organizations
must submit the information described in
this section 6.04(2), as applicable, in addi-
tion to the information generally required
by this section 6.
(a) Private schools. If the group appli-
cation involves subordinate organiza-
tions that are or will be private schools
described in § 501(c)(3), the central
organization must include the informa-
tion 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 establish that the
subordinate organizations comply with
the requirements of Rev. Rul. 71-447,
1971-2 C.B. 230.
(b) Charitable hospitals. If the group
application involves subordinate organi-
zations that are or will be hospital organi-
zations or facilities described in § 501(c)
(3), the central organization must provide
the information necessary to establish that
each subordinate organization meets the
requirements of § 501(r) and Rev. Rul.
69-545, 1969-2 C.B. 117.
(c) Social welfare organizations. If the
group application involves subordinate
organizations that are or will be described
in § 501(c)(4), the central organization
must represent that each subordinate orga-
nization has complied with or will comply
with the requirements of § 506 and Rev.
Proc. 2016-41, 2016-30 I.R.B. 165. A sub-
ordinate organization may authorize an
individual representing a central organiza-
tion to submit Form 8976, Notice of Intent
to Operate Under Section 501(c)(4), on

Bulletin No. 2026–4 387 January 20, 2026
behalf of the subordinate organization and
to receive any communications relating to
the submission.
(3) Updates to a pending group appli-
cation. If a central organization deter-
mines that any of the information or
representations regarding a subordinate
organization set forth in a group applica-
tion is not accurate after the group appli-
cation has been filed with the IRS, the
central organization must submit addi-
tional information to the IRS correcting
the inaccurate information or representa-
tions. For example, if a subordinate orga-
nization included in a group application
ceases operations and dissolves under
state law after the group application was
filed with the IRS, the central organiza-
tion must provide an updated list of sub-
ordinate organizations to be included in
the group exemption letter that does not
include the organization that went out of
existence.
.05 New group application 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, a central organi-
zation may file a new group application
in the manner described in this section 6,
but the central organization must include
a description of the policies or procedures
it has implemented, or intends to imple-
ment, to ensure the new group exemption
letter satisfies the requirements of this rev-
enue procedure.
SECTION 7. INFORMATION
REQUIRED TO MAINTAIN A GROUP
EXEMPTION LETTER
.01 Information required annually.
Except as provided in section 7.05 of
this revenue procedure (regarding central
organizations that are churches or conven-
tions or associations of churches), a cen-
tral organization must submit the informa-
tion described in this section 7 to the IRS
annually at least 30 days, but no more than
90 days, before the close of the central
organization’s annual accounting period.
A central organization may provide addi-
tional updates at any time.
.02 Supplemental group ruling infor-
mation (SGRI).
(1) Change in purpose, character, or
method of operation. A central organiza-
tion must submit information regarding
all changes in the purposes, character,
or method of operation of all subordi-
nate organizations included in the group
exemption letter.
(2) Lists of certain changes.
(a) Categories. A central organization
must submit a separate list for each of the
following categories of changes (as appli-
cable):
(i) Subordinate organizations that
have changed their name and/or mailing
address during the year;
(ii) Subordinate organizations that are
no longer included in the group exemption
letter;
(iii) Subordinate organizations whose
exemptions have been automatically
revoked; and
(iv) Subordinate organizations that are
being added to the group exemption letter.
(b) Required information. Each list
described in this section 7.02(2) must
include the name, mailing address, and
EIN for each subordinate organization
identified in the list.
(c) No annotated directories. An anno-
tated directory of subordinate organiza-
tions is not acceptable for purposes of this
section 7.02(2).
(3) Organizations to be added to the
group exemption letter as subordinate
organizations. A central organization must
submit the following statements and infor-
mation regarding the subordinate organi-
zations being added to the central organi-
zation’s group exemption letter:
(a) The date of formation or incorpora-
tion of each subordinate organization;
(b) A statement that the information
upon which the group exemption letter
was based (see section 6.04 of this rev-
enue procedure, regarding information
about subordinate organizations to be
included with a group application), as
updated by the current or previous SGRI
submissions, is applicable in all material
respects to each subordinate organization;
(c) A statement that the central organi-
zation has written authorization to include
the subordinate organizations in the group
exemption letter (see section 6.04(1)(l) of
this revenue procedure);
(d) A statement regarding the account-
ing period of subordinate organizations on
behalf of which the central organization
will file a group return, if applicable (see
section 6.04(1)(n) of this revenue proce-
dure); and
(e) Any additional information required
by section 6.04(2) of this revenue proce-
dure (pertaining to private schools, chari-
table hospitals, and social welfare organi-
zations), if applicable.
(4) Other Information. A central orga-
nization must submit any other informa-
tion that the IRS may specify in guidance
published in the Internal Revenue Bulletin
or in forms, instructions, publications, or
a posting on irs.gov issued with respect to
this revenue procedure.
(5) No change. If there are no changes
that are required to be reported under this
section 7, a central organization must sub-
mit a statement that it has no reportable
changes.
.03 Electronic submission. The infor-
mation required in this section 7 must be
submitted electronically. If the IRS has
not published procedures for electronic
submission of the information required in
this section 7 by the publication date, then
the information must be sent to the address
set forth below. The IRS may change the
address below and procedures for the sub-
mission of information required by this
section 7 through guidance published in
the Internal Revenue Bulletin or in forms,
instructions, publications, or a posting on
irs.gov issued with respect to this revenue
procedure.
Ogden Service Center
Mail Stop 6271
1000 South 1200
Ogden, UT 84404-4749
.04 Additional information. Sub-
mission of the information required by
this section 7 does not relieve a central
organization or any of its subordinate
organizations of the duty to submit such
additional information as the IRS may
require to determine whether the condi-
tions for continued exemption are met.
See §§ 6001 and 6033 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 a convention or association
of churches and that maintains a group
exemption letter may, but is not required

January 20, 2026 388 Bulletin No. 2026–4
to, submit the information described in
this section 7.
SECTION 8. TERMINATION OF,
OR REMOVAL FROM, THE GROUP
EXEMPTION LETTER
.01 Termination of the group exemption
letter.
(1) Termination by the IRS. Subject to
the applicability provisions set forth in
section 12 of this revenue procedure, the
IRS may terminate a group exemption let-
ter for any of the reasons set forth in this
section 8.01(1). See section 6.05 of this
revenue procedure if a central organiza-
tion files a new group application after the
IRS terminates the central organization’s
group exemption letter.
(a) The central organization notifies the
IRS that the central organization 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 (other than
a church or a convention or association of
churches) fails to submit timely and com-
plete SGRI.
(e) The central organization has no
subordinate organizations.
(f) The central organization fails to
exercise general supervision or control
over one or more subordinate organiza-
tions.
(g) More than half of the subordinate
organizations have had their exemptions
automatically revoked.
(h) More than half of the subordinate
organizations fail to satisfy the matching
or uniform purpose statement requirement
in section 4.03(2) of this revenue proce-
dure.
(i) The central organization otherwise
fails to satisfy the requirements of this
revenue procedure.
(2) Termination by the central orga-
nization. A central organization may ter-
minate its group exemption letter at any
time by submitting a statement in the same
manner as an SGRI submission as set forth
in section 7.03 of this revenue procedure.
The central organization should notify
each subordinate organization of the ter-
mination and provide information regard-
ing how the subordinate organization may
obtain recognition of its exemption (see
section 9.05 of this revenue procedure) or
claim exemption without recognition (see
section 9.06 of this revenue procedure).
.02 Removal from the group exemption
letter.
(1) Basis for removal by the IRS.
(a) The IRS will remove a subordinate
organization from a group exemption let-
ter if:
(i) The IRS determines that the subor-
dinate organization is no longer described
in § 501(c) and therefore is not exempt
under § 501(a);
(ii) The IRS determines that the sub-
ordinate organization is an organization
not eligible for initial inclusion in a group
application, or subsequent addition to
a group exemption letter, because it is a
foreign organization, private foundation,
Type III supporting organization, or quali-
fied nonprofit health insurance issuer;
(iii) The subordinate organization’s
exemption is automatically revoked; or
(iv) The IRS determines that the subor-
dinate organization is described in a para-
graph of § 501(c) that is different from
the paragraph in which the central orga-
nization stated that the subordinate orga-
nizations would be described in its group
application.
(b) The IRS may remove a subordi-
nate organization from a group exemp-
tion letter if the IRS determines that the
subordinate organization otherwise fails
to meet the requirements of this revenue
procedure or guidance published in the
Internal Revenue Bulletin or in forms,
instructions, publications, or a posting on
irs.gov issued with respect to this revenue
procedure.
(2) Basis for removal by the central
organization. A subordinate organiza-
tion will cease to be included in a group
exemption letter on the date the central
organization notifies the IRS, through an
SGRI submission consistent with section
7.02(2)(a)(ii) of this revenue procedure,
that the subordinate organization is no
longer included in the group exemption
letter. Removal of a subordinate organi-
zation by the central organization can be
with or without cause. The central organi-
zation may not submit the SGRI removing
the subordinate organization prior to the
end of the 30-day period set forth in sec-
tion 8.02(3) of this revenue procedure.
(3) Notification. A central organization
must provide a subordinate organization
with at least 30 days’ notice prior to remov-
ing the subordinate organization from the
central organization’s group exemption
letter. After removing the subordinate
organization from the group exemption
letter by submitting SGRI to the IRS, the
central organization also must notify the
subordinate organization that it has been
removed from the group exemption letter
and provide the subordinate organization
with information regarding how it may
obtain recognition of its exemption (see
section 9.05 of this revenue procedure) or
claim exemption without recognition (see
section 9.06 of this revenue procedure).
(4) Group exemption letter remains in
effect. After the removal of one or more
subordinate organizations under this sec-
tion 8.02, a group exemption letter will
remain in effect for all subordinate organi-
zations that were not removed. However,
if no subordinate organizations remain
after the removal, the IRS will terminate
the central organization’s group exemp-
tion letter. (See section 8.01(1)(e) of this
revenue procedure.)
SECTION 9. EFFECT OF NON-
ACCEPTANCE, NON-ISSUANCE,
TERMINATION, OR REMOVAL
.01 Effect of non-acceptance or non-is-
suance. Except as provided in this sec-
tion 9, if the IRS does not accept a group
application because it lacks information
required by this revenue procedure or if
the IRS declines to issue a group exemp-
tion letter in the interest of sound tax
administration, the IRS will not recog-
nize the exemption of any organization
included in the group application as a
subordinate organization. If the IRS previ-
ously issued a determination letter to such
subordinate organization individually and
that determination letter is still effective
on the date of non-acceptance or non-issu-
ance, as applicable, then the IRS will rec-
ognize the existing determination letter.
Alternatively, the subordinate organiza-
tion may obtain recognition of its exemp-
tion by completing one of the actions set
forth in section 9.05 of this revenue proce-
dure, relating to subsequent recognition of

Bulletin No. 2026–4 389 January 20, 2026
exemption. (See section 9.06 of this rev-
enue procedure for subordinate organiza-
tions not required to apply for recognition
of exemption under § 505 or § 508.)
.02 Effect of termination. Except as
provided in this section 9, if the IRS or
a central organization terminates a group
exemption letter for all subordinate orga-
nizations, the IRS will not thereafter
recognize the exemption of any subordi-
nate organization included in the group
exemption letter unless such subordinate
organization completes one of the actions
described in section 9.05 of this revenue
procedure, relating to subsequent recog-
nition of exemption. (See section 9.06 of
this revenue procedure for subordinate
organizations not required to apply for
recognition of exemption under § 505 or
§ 508.)
.03 Effect of removal. If the IRS or the
central organization removes a subordi-
nate organization from a group exemption
letter, the IRS will not thereafter recog-
nize the exemption of that subordinate
organization unless such subordinate
organization completes one of the actions
described in section 9.05 of this revenue
procedure, relating to subsequent recog-
nition of exemption. (See section 9.06 of
this revenue procedure for subordinate
organizations not required to apply for
recognition of exemption under § 505 or
§ 508.)
.04 Churches and conventions or
associations of churches. The tax-ex-
empt status of any organization that is
described in § 501(c)(3) that is a church
or convention or association of churches
and is (1) included as a subordinate orga-
nization in a group application that is not
accepted or not issued, (2) part of a group
exemption letter that is terminated, or (3)
removed from a group exemption letter in
accordance with section 8 of this revenue
procedure, will not be affected by such
non-acceptance or non-issuance, termina-
tion, or removal. See § 508(c)(1)(A).
.05 Subsequent recognition of exemp-
tion.
(1) In general. Notwithstanding sec-
tions 9.01, 9.02, and 9.03 of this revenue
procedure, and subject to section 9.07 of
this revenue procedure, an organization
that (i) is included as a subordinate orga-
nization in a group application that is not
accepted or for which the IRS declines
to issue a group exemption letter, (ii) is
a subordinate organization under a group
exemption letter that is terminated, or
(iii) is a subordinate organization that is
removed from a group exemption letter,
may obtain recognition of exemption by
completing one of the actions described in
this section 9.05, as applicable.
(2) Organization required to file an
application. An organization required to
apply for recognition of exemption under
§ 505 or § 508 that has not had its exemp-
tion automatically revoked may obtain
recognition of exemption by:
(a) Filing an application for which the
IRS issues a favorable determination;
(b) In circumstances where a group
application is not accepted or a group
exemption letter is not issued by the IRS,
being included by the same central orga-
nization in a new group application, if the
group exemption letter is issued;
(c) In circumstances where a group
exemption letter is terminated, being
included by the same central organization
in a new group application, if the group
exemption letter is issued;
(d) Being included by a different central
organization in a new group application, if
the group exemption letter is issued;
(e) In circumstances where a subordi-
nate organization is removed from a group
exemption letter, being added back to the
group exemption letter from which it was
removed; or
(f) Being added to a group exemption
letter maintained by a different central
organization.
(3) Organization not required to file an
application. An organization (including
a church or convention or association of
churches) that is not required to apply for
recognition of exemption under § 505 or
§ 508 and that has not had its exemption
automatically revoked may obtain recog-
nition of its exemption in the same man-
ner described in section 9.05(2) of this
revenue procedure, relating to procedures
for an organization required to apply for
recognition of exemption under § 505 or
§ 508, but the organization is not required
to do so. An organization that intends to
operate as an organization described in
§ 501(c)(4) is required to submit a com-
pleted Form 8976 in the manner described
in Rev. Proc. 2016-41 (unless an excep-
tion applies).
.06 Subsequent exemption without rec-
ognition from the IRS. Notwithstanding
sections 9.01, 9.02, and 9.03 of this reve-
nue procedure, and subject to section 9.07
of this revenue procedure, an organization
that is not required to apply for recogni-
tion of exemption under § 505 or § 508
may qualify for tax-exempt status with-
out applying for recognition of exemption
from the IRS, provided that the organiza-
tion satisfies the requirements for tax-ex-
empt status and files annual information
returns or notices (unless an exception to
the annual return or notice requirement
applies). An organization that intends to
operate as an organization described in
§ 501(c)(4) is required to submit a com-
pleted Form 8976 in the manner described
in Rev. Proc. 2016-41 (unless an excep-
tion applies).
.07 Automatic revocation. If a subor-
dinate organization’s exemption has been
automatically revoked, it must file an
application for reinstatement to qualify for
tax-exempt status, regardless of whether
the organization was originally required
to apply for recognition of exemption
under § 505 or § 508. See § 6033(j)(2). An
organization whose exemption has been
automatically revoked can be included in
a new group application as a subordinate
organization or added to a group exemp-
tion letter as a subordinate organization
only after being reinstated pursuant to
Rev. Proc. 2014-11. See section 4.04(5) of
this revenue procedure.
SECTION 10. EFFECTIVE DATE OF
EXEMPTION
.01 Initial inclusion. If all the subor-
dinate organizations included in a group
application were organized within 27
months of the submission date of the
group application, the effective date of
exemption for each subordinate organiza-
tion will be the subordinate organization’s
date of formation. If a group application
includes one or more subordinate orga-
nizations that were organized more than
27 months before the submission date of
the group application, the effective date of
exemption for each subordinate organiza-
tion will generally be the submission date
of the group application. However, in this
latter context, the effective date of exemp-
tion of a subordinate organization that was

January 20, 2026 390 Bulletin No. 2026–4
recognized by the IRS as being described
in § 501(c) or included in another group
exemption letter immediately prior to
being included in a group application will
be the effective date of the organization’s
exemption immediately prior to being
included in the group application. For
purposes of this section 10, “immediately
prior” means that the organization was
recognized by the IRS as being described
in § 501(c) on the date the new group
application is submitted.
.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 the organization’s tax-exempt
status immediately prior to its addition
to the group exemption letter. If, at such
time, the organization was recognized by
the IRS as being described in § 501(c),
the effective date of exemption will be the
effective date of the organization’s exemp-
tion immediately prior to its addition to
the group exemption letter to which it is
being added. If an organization is not rec-
ognized by the IRS as being described in
§ 501(c) immediately prior to its addition
to the group exemption letter, its effective
date of exemption will be its date of for-
mation if the organization was organized
within 27 months of the submission date
of the SGRI adding the organization to the
group exemption letter. Alternatively, if
the organization was organized more than
27 months before the submission date of
the SGRI adding the organization to the
group exemption letter, its effective date
of exemption will be the submission date
of the SGRI adding it to the group exemp-
tion letter. Cf. section 6.09 of Rev. Proc.
2026-5 (or corresponding section(s) of its
successor).
.03 Non-acceptance, non-issuance, ter-
mination, or removal.
(1) In general. The effective date of
exemption for any organization seeking
subsequent recognition of exemption in
accordance with section 9.05 of this reve-
nue procedure depends on the action taken
by such organization, as set forth in this
section 10.03.
(2) Organizations filing an application.
(a) Non-acceptance or non-issuance.
If the IRS does not accept a group appli-
cation, or if the IRS declines to issue a
group exemption letter, and an organiza-
tion included in the group application as
a subordinate organization subsequently
files an application, the effective date of
exemption for the organization will be
determined in accordance with section
6.09 of Rev. Proc. 2026-5 (or correspond-
ing section(s) of its successor), provided
that the organization otherwise meets the
requirements for tax-exempt status.
(b) Termination or removal.
(i) In general. If the IRS or a central
organization terminates a group exemp-
tion letter or if the IRS or a central orga-
nization removes a subordinate organiza-
tion from a group exemption letter and
the subordinate organization subsequently
files an application, the effective date of
exemption for such subordinate organi-
zation will be determined under section
10.03(2)(b)(ii) or (iii) of this revenue pro-
cedure, as applicable.
(ii) Application filed within 27 months
of termination or removal. If an organi-
zation included in a group exemption let-
ter as a subordinate organization files an
application within 27 months of the date
on which the group exemption letter was
terminated or the subordinate organiza-
tion was removed from the group exemp-
tion letter, the effective date of exemption
for the subordinate organization will be
the date on which the group exemption
letter was terminated or the subordinate
organization was removed from the group
exemption letter, provided that the subor-
dinate organization otherwise meets the
requirements for tax-exempt status.
(iii) Application filed more than 27
months after termination or removal. If an
organization included in a group exemp-
tion letter as a subordinate organization
files an application more than 27 months
after the date on which the group exemp-
tion letter was terminated or the subordi-
nate organization was removed from the
group exemption letter, the effective date
of exemption for the former subordinate
organization will be the submission date
of its application, provided that the orga-
nization otherwise meets the requirements
for tax-exempt status.
(3) Organizations being included in a
new group application. The effective date
of exemption for any subordinate organi-
zation described in section 9.05(2) or (3)
of this revenue procedure seeking recog-
nition of exemption by being included in a
new group application by the same central
organization or a different central organi-
zation is as set forth in section 10.01 of
this revenue procedure.
(4) Organizations being added to a
group exemption letter. The effective date
of exemption for any subordinate organi-
zation seeking recognition of exemption
by being added back to the group exemp-
tion letter from which it was removed or
by being added to a group exemption let-
ter maintained by a different central orga-
nization is as set forth in section 10.02 of
this revenue procedure.
(5) Automatic revocation. The effec-
tive date of exemption for an organiza-
tion whose exemption was automatically
revoked and that files an application for
reinstatement is the effective date of the
organization’s reinstatement, determined
in accordance with Rev. Proc. 2014-11. If
the organization is subsequently included
in a new group application as a subor-
dinate organization or added to a group
exemption letter as a subordinate organi-
zation, the organization’s effective date of
exemption will be determined pursuant to
section 10.01 or 10.02 of this revenue pro-
cedure, as applicable.
SECTION 11. DECLARATORY
JUDGMENT PROVISIONS OF § 7428
.01 In general. Section 10 of Rev. Proc.
2026-5 (or corresponding section(s) of its
successor) generally explains when and
how a declaratory judgment 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 Who must file. An organization must
file a declaratory judgment action under
§ 7428 on its own behalf. Thus, a subor-
dinate organization must file a declaratory
judgment action under § 7428 regarding
an IRS determination affecting the subor-
dinate organization’s initial or continuing
qualification or classification. (A central
organization cannot file a declaratory
judgment action under § 7428 on behalf
of one or more of its subordinate organi-
zations.) Similarly, a subordinate organi-
zation cannot file a declaratory judgment
action under § 7428 on behalf of its cen-
tral organization. For more information on

Bulletin No. 2026–4 391 January 20, 2026
the application of § 7428, see section 10 of
Rev. Proc. 2026-5 (or corresponding sec-
tion(s) of its successor).
SECTION 12. APPLICABILITY
.01 New group exemption letters.
This revenue procedure applies to group
exemption letters applied for after January
20, 2026.
.02 Preexisting group exemption let-
ters.
(1) In general. Except as otherwise
provided in this section 12.02, this reve-
nue procedure applies to:
(a) all central organizations with one or
more preexisting group exemption letters;
(b) preexisting subordinate organiza-
tions; and
(c) subordinate organizations added to
preexisting group exemption letters on or
after the publication date.
(2) Transition period for certain
requirements applicable to preexisting
group exemption letters and preexisting
subordinate organizations.
(a) In general. Certain provisions of this
revenue procedure do not apply to preex-
isting group exemption letters and preex-
isting subordinate organizations during the
period that begins on the publication date
and ends on January 22, 2027 (transition
period). The sections of this revenue proce-
dure described in this section 12.02(2) do
not apply to preexisting group exemption
letters and preexisting subordinate organi-
zations during the transition period:
(i) Section 4.01(2) of this revenue pro-
cedure, providing that a central organiza-
tion must have at least one subordinate
organization to maintain a group exemp-
tion letter;
(ii) Section 4.01(3) of this revenue pro-
cedure, providing that a central organiza-
tion can maintain only one group exemp-
tion letter;
(iii) Section 4.02 of this revenue proce-
dure, describing the central organization’s
relationship with its subordinate organiza-
tions, as it relates to the affiliation and gen-
eral supervision or control requirements
between a central organization and its pre-
existing subordinate organizations; and
(iv) Section 4.03(2)(a) of this revenue
procedure, providing that all subordinate
organizations initially included in a group
application, or subsequently added to a
group exemption letter must be described
in the same paragraph of § 501(c).
(b) Minimum number of subordinate
organizations. Before the end of the tran-
sition period, a central organization that
has a preexisting group exemption letter
but does not have at least one subordinate
organization must either:
(i) add at least one subordinate orga-
nization to its group exemption letter in
accordance with section 7.02(2)(a)(iv) of
this revenue procedure, or
(ii) terminate the group exemption let-
ter in accordance with section 8.01(2) of
this revenue procedure.
(c) More than one group exemption let-
ter. Before the end of the transition period,
a central organization that maintains more
than one preexisting group exemption let-
ter must terminate either all or all but one
of its preexisting group exemption letters.
The central organization must choose
which, if any, preexisting group exemp-
tion letter it intends to maintain. The cen-
tral organization must provide the IRS
copies of all its preexisting group exemp-
tion letters and terminate the preexisting
group exemption letters it does not intend
to maintain in accordance with section
8.01(2) of this revenue procedure.
(d) Central organization’s relationship
with its subordinate organizations. Before
the end of the transition period, a central
organization must ensure that each pre-
existing subordinate organization is affil-
iated with and subject to its general super-
vision or control, within the meaning of
section 4.02(2) and (3) or 4.02(4) of this
revenue procedure. If a central organiza-
tion is unable to ensure that a preexisting
subordinate organization is affiliated with
and subject to its general supervision or
control, it must remove the subordinate
organization from the group exemption
letter in accordance with section 8.02(2)
of this revenue procedure.
(e) Preexisting subordinate organiza-
tions described in different paragraphs of
§ 501(c). Before the end of the transition
period, a central organization that has a
preexisting group exemption letter that
includes preexisting subordinate organi-
zations that are described in a paragraph
of § 501(c) that is not the paragraph speci-
fied in the group application must remove
the preexisting subordinate organizations
that are not described in the paragraph of
§ 501(c) specified in the group applica-
tion, in accordance with section 8.02(2) of
this revenue procedure.
(f) Timing of actions. The actions
required under this section 12.02(2) are
accomplished through SGRI submissions
and must be completed before the transi-
tion period ends on January 22, 2027.
(3) Certain requirements not applica-
ble to preexisting subordinate organiza-
tions. The sections of this revenue pro-
cedure described in this section 12.02(3)
do not apply to preexisting subordinate
organizations:
(a) Section 4.03(2)(b) of this revenue
procedure, regarding the requirement that
subordinate organizations sharing the
same purpose have a uniform purpose
statement;
(b) Section 4.04(3) of this revenue pro-
cedure, providing that a Type III support-
ing organization cannot be a subordinate
organization;
(c) Section 4.04(4) of this revenue
procedure, providing that a qualified non-
profit health insurance issuer described in
§ 501(c)(29) cannot be a subordinate orga-
nization; and
(d) Section 4.06(2) of this revenue
procedure, regarding the requirement that
the authorization for initial inclusion in a
group application, or subsequent addition
to a group exemption letter, described in
section 4.06(1) of this revenue procedure
acknowledge that the central organization
may remove the subordinate organization
from the group exemption letter with or
without cause.
.03 Examples. The application of this
section 12 is illustrated by the following
examples.
(1) Example 1. Two preexisting group exemp-
tion letters for subordinate organizations described
in different paragraphs of § 501(c). Central organi-
zation B has two preexisting group exemption let-
ters, one for subordinate organizations described in
§ 501(c)(3) and one for subordinate organizations
described in § 501(c)(4). Under section 4.01(3) of
this revenue procedure, a central organization may
maintain only one preexisting group exemption let-
ter. This requirement, however, does not apply until
after the transition period (see section 12.02(2)(a)(ii)
of this revenue procedure). Assuming B intends to
maintain one of the two preexisting group exemp-
tion letters, before the end of the transition period B
must identify the preexisting group exemption let-
ter it intends to retain, provide copies of both group
exemption letters to the IRS, and notify the IRS of
the group exemption letter it will terminate. B (and
not the IRS) is responsible for informing the sub-

January 20, 2026 392 Bulletin No. 2026–4
ordinate organizations under the terminated group
exemption letter that they may obtain recognition of
exemption by taking an action described in section
9.05 of this revenue procedure (see section 9.02 of
this revenue procedure, regarding the effect of ter-
mination).
(2) Example 2. One preexisting group exemption
letter with no subordinate organizations. Central
organization C has a single preexisting group exemp-
tion letter for subordinate organizations described in
§ 501(c)(3), but it currently does not have any sub-
ordinate organizations under the preexisting group
exemption letter. Under section 4.01(2) of this rev-
enue procedure, a central organization must have at
least one subordinate organization to maintain a group
exemption letter. This requirement, however, does not
apply to preexisting group exemption letters until after
the transition period (see section 12.02(2)(a)(i) of this
revenue procedure). Before the end of the transition
period, C must either add at least one subordinate
organization described in § 501(c)(3) to the preex-
isting group exemption letter or notify the IRS that it
will terminate the preexisting group exemption letter
(see section 12.02(2)(b) of this revenue procedure).
If C adds a subordinate organization to the preexist-
ing group exemption letter, C must submit the SGRI
described in section 7.02(3) of this revenue procedure
before the end of the transition period. The subordi-
nate organization that is added to the preexisting group
exemption letter is not a preexisting subordinate orga-
nization. Accordingly, the requirements of section 4 of
this revenue procedure (regarding the requirements to
obtain and maintain a group exemption letter) apply,
other than section 4.01 of this revenue procedure. In
addition, because the subordinate organization that
is added to the preexisting group exemption letter is
not a preexisting subordinate organization, sections
12.02(2)(a)(iii) and (iv) and 12.02(3) of this revenue
procedure do not apply.
(3) Example 3. One preexisting group exemption
letter with subordinate organizations described in dif-
ferent paragraphs of § 501(c). Central organization D
has a preexisting group exemption letter with multiple
subordinate organizations. The group application D
filed pursuant to Rev. Proc. 80-27 stated that the sub-
ordinate organizations would be described in § 501(c)
(3). In addition to subordinate organizations described
in § 501(c)(3), some of the subordinate organizations
under the preexisting group exemption letter are
described in § 501(c)(4). Under section 4.03(2)(a) of
this revenue procedure, all subordinate organizations
must be described in the same paragraph of § 501(c).
Before the end of the transition period, D must remove
the subordinate organizations described in § 501(c)
(4), in accordance with the removal provision in sec-
tion 8.02(2) of this revenue procedure.
(4) Example 4. One preexisting group exemption
letter with preexisting subordinate organizations
described in the same paragraph of § 501(c). Central
organization E has a preexisting group exemption let-
ter for subordinate organizations described in § 501(c)
(3). The preexisting group exemption letter has more
than one preexisting subordinate organization. E is not
required to make any changes to the group exemption
letter during the transition period provided it has at
least one subordinate organization, all the subordinate
organizations are described in the same paragraph of
§ 501(c), and E’s relationship with its subordinate
organizations, as it relates to the affiliation and gen-
eral supervision or control requirements, satisfies the
requirements of section 4.02 of this revenue proce-
dure. The preexisting subordinate organizations are
subject to the requirements of this revenue procedure
except as set forth in section 12.02(3) of this revenue
procedure. If E adds a subordinate organization to
the preexisting group exemption letter after the pub-
lication date, E must submit the SGRI described in
section 7.02(3) of this revenue procedure. The sub-
ordinate organization that is added to the preexisting
group exemption letter is not a preexisting subordinate
organization. Accordingly, the requirements in section
4 of this revenue procedure (regarding the require-
ments to obtain and maintain a group exemption let-
ter) apply to the subordinate organization that is added
to the preexisting group exemption letter, other than
section 4.01 of this revenue procedure. Furthermore,
because the subordinate organization that is added to
the preexisting group exemption letter is not a preex-
isting subordinate organization, sections 12.02(2)(a)
(iii) and (iv) and 12.02(3) of this revenue procedure
do not apply.
(5) Example 5. Removal of a preexisting subor-
dinate organization from a preexisting group exemp-
tion letter. Central organization F has a preexisting
group exemption letter for subordinate organizations
described in § 501(c)(3). There are multiple preexist-
ing subordinate organizations under the preexisting
group exemption letter. F removed one preexisting
subordinate organization from the preexisting group
exemption letter for failure to comply with one or
more of the requirements of this revenue procedure.
Under section 8.02(4) of this revenue procedure, the
preexisting group exemption letter remains effective
for all preexisting subordinate organizations that were
not removed. Pursuant to section 9.05(2)(e) of this
revenue procedure, the preexisting subordinate orga-
nization that was removed from the preexisting group
exemption letter may obtain recognition of its exemp-
tion by being added back to the preexisting group
exemption letter; however, if the preexisting subordi-
nate organization was automatically revoked, it must
be reinstated pursuant to Rev. Proc. 2014-11 first (see
section 9.07 of this revenue procedure). If F adds the
organization that was removed back to the preexist-
ing group exemption letter, the organization that is
added back to the preexisting group exemption letter
is not a preexisting subordinate organization under the
definition preexisting subordinate organization in sec-
tion 3.10 of this revenue procedure. Accordingly, the
requirements of section 4 of this revenue procedure
(regarding the requirements to obtain and maintain
a group exemption letter) apply to the organization
that is added back to the preexisting group exemption
letter, other than section 4.01 of this revenue proce-
dure. Furthermore, because the organization that is
added back to the preexisting group exemption letter
is not a preexisting subordinate organization, sections
12.02(2)(a)(iii) and (iv) and 12.02(3) of this revenue
procedure do not apply.
SECTION 13. PAPERWORK
REDUCTION ACT
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520) (PRA) generally
requires that a Federal agency obtain the
approval of the Office of Management and
Budget (OMB) before collecting informa-
tion from the public, whether such collec-
tion of information is mandatory, voluntary,
or required to obtain or retain a benefit. An
agency may not conduct or sponsor, and a
person is not required to respond to, a col-
lection of information unless it displays
a valid control number assigned by the
Office of Management and Budget.
The collections of information included
in this revenue procedure are reporting and
third-party disclosures in sections 6, 7, and
8 of this revenue procedure. The informa-
tion in section 6 of this revenue procedure
is required to be submitted by the central
organization to obtain a group exemption
letter. This information will be used to
determine whether a central organization
may obtain recognition of exemption from
federal income tax on a group basis for
organizations described in § 501(c) that are
affiliated with and under its general super-
vision or control. The information in sec-
tion 7 of this revenue procedure is required
to be submitted by the central organization
annually to maintain a group exemption
letter. The information in section 8 of this
revenue procedure is required for a central
organization to inform the subsidiaries of a
revocation by the IRS or the organization,
and for a central organization to inform the
IRS of a decision to revoke a group exemp-
tion. This information will be used to allow
the IRS to maintain up to date records
regarding group exemption letters and to
ensure compliance with the requirements
of this revenue procedure. The collections
of information are required to obtain a
benefit. The likely respondents are central
organizations that are tax-exempt organiza-
tions and their authorized representatives.
The estimated annual frequency of
responses (used for reporting require-
ments only) is once for group applica-
tions and annually for SGRI submissions.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required by
§ 6103.
The collections contained in this rev-
enue procedure have been submitted to
the Office of Management and Budget for

Bulletin No. 2026–4 393 January 20, 2026
approval in accordance with the 5 CFR
1320.10, under OMB Control Number
1545-0047.
SECTION 14. EFFECT ON OTHER
REVENUE PROCEDURES
.01 Rev. Proc. 80-27 (as modified by
Rev. Proc. 96-40) is modified and super-
seded.
.02 Section 2.02(1) of Rev. Proc.
2026-5 is modified to cite this revenue
procedure in lieu of Rev. Proc. 80-27.
.03 Rev. Proc. 2026-5 is modified by
deleting all provisions referring to the IRS
not accepting requests for group exemption
letters, including section 3.02(11) of Rev.
Proc. 2026-5, and any internal references to
section 3.02(11) of Rev. Proc. 2026-5
SECTION 15. EFFECTIVE DATE
This revenue procedure is effective on
and after January 20, 2026.
SECTION 16. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Seth J. Groman of the Office
of Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and
Employment Taxes). For further infor-
mation regarding this revenue procedure
contact Seth J. Groman on (202) 317-5640
(not a toll-free call).
Rev. Proc. 2026-9
SECTION 1. PURPOSE
This revenue procedure publishes the
amounts of unused housing credit carry-
overs allocated to qualified states under §
42(h)(3)(D) of the Internal Revenue Code
for calendar year 2025.
SECTION 2. BACKGROUND
Rev. Proc. 2019-45, 2019-48 I.R.B.
524, provides guidance to state housing
credit agencies of qualified states on the
procedure for requesting an allocation of
unused housing credit carryovers under
§ 42(h)(3)(D). The amount of unused
housing credit carryovers allocated to
qualified states for a calendar year from
a national pool of unused credit authority
(the National Pool) is published by the
Internal Revenue Service in the Internal
Revenue Bulletin. This revenue procedure
publishes these amounts for calendar year
2025.
SECTION 3. PROCEDURE
The unused housing credit carryover
amount allocated from the National Pool
by the Secretary to each qualified state for
calendar year 2025 is as follows:
Qualified StateAmount Allocated
Alabama312,546
Alaska44,851
California2,389,455
Connecticut222,702
Delaware63,744
Florida1,416,309
Illinois770,210
Iowa196,428
Kentucky278,046
Massachusetts432,437
Michigan614,491
Nebraska121,527
New Mexico129,089
New York1,203,915
North Carolina669,367
North Dakota48,270
Pennsylvania792,546
Rhode Island67,404
South Dakota56,033
Texas1,896,161
Utah212,312
Vermont39,297
Virginia533,941
Washington482,250
West Virginia107,257

January 20, 2026 394 Bulletin No. 2026–4
Because of the timing of the publication
of this revenue procedure, any amount of
unused housing credit carryover published
in this revenue procedure that a qualified
state fails to allocate before the close of
2025 will not be considered in determin-
ing whether that state qualifies for an allo-
cation of unused housing credit carryover
for calendar year 2026.
EFFECTIVE DATE
This revenue procedure is effective
for allocations of housing credit dollar
amounts attributable to the National
Pool component of a qualified state’s
housing credit ceiling for calendar year
2025.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Waheed Olayan of the Office
of Associate Chief Counsel (Energy,
Credits and Excise Tax). For further infor-
mation regarding this revenue procedure,
contact Mr. Olayan at (202) 317-6239 (not
a toll-free number).
Section 42 - Low-Income Housing Credit.
26 CFR 1.42-14.
Allocation rules for post-1989 State housing credit ceiling amounts.
Guidance is provided to state housing credit agencies of qualified states that request an allocation of unused housing credit carryover
under section 42(h)(3)(D) of the Internal Revenue Code. See Rev. Proc. 2024-41.
26 CFR 601.201: Rulings and determination letters
(Also: Part 1, §§ 1295; 1.1295-3)
Rev. Proc. 2026-10
SECTION 1. PURPOSE
.01 In General.
This revenue procedure provides addi-
tional guidance on the process for request-
ing private letter rulings from the Internal
Revenue Service (IRS), as generally set
forth in Rev. Proc. 2026-1, 2026-1 I.R.B.
1, for consent to make retroactive qualified
electing fund (QEF) elections under sec-
tion 1295(b) of the Internal Revenue Code
(Code) and Treas. Reg. § 1.1295-3(f).
Establishing whether a shareholder of
a passive foreign investment company
(PFIC) meets the requirements for making
a retroactive QEF election and determin-
ing the correct user fee can be involved
and fact intensive. In some cases, PFIC
shareholders have submitted retroactive
QEF election ruling requests that do not
meet the requirements, contain incom-
plete information, are accompanied by
incorrect user fees, or for which they are
unable to provide additional information
requested by the IRS that is necessary to
determine whether the retroactive QEF
election is available. These issues may
prolong the ruling request process and
increase the burden on both taxpayers and
the IRS.
This revenue procedure is intended
to improve the retroactive QEF election
ruling process by explaining the require-
ments for ruling eligibility, addressing
common issues that arise with user fees
in this context, and detailing the post-sub-
mission process, including the determina-
tion of whether granting consent would
prejudice the interests of the United States
government under Treas. Reg. § 1.1295-
3(f)(3).
.02 References. As the context requires,
references to Rev. Proc. 2026-1 include
successor revenue procedures.
SECTION 2. BACKGROUND
.01 QEF Elections.
Generally, a foreign corporation is a
PFIC under section 1297 for a taxable
year if the foreign corporation satisfies
either the income or asset test of section
1297(a) for that year. A foreign corpora-
tion is a PFIC under the income test if 75
percent or more of its gross income for its
taxable year is passive income. Alterna-
tively, under the asset test, a foreign cor-
poration is a PFIC if 50 percent or more
of its assets, measured by average annual
value or adjusted bases (as determined
pursuant to Treas. Reg. § 1.1297-1(d)),
during its taxable year are assets that pro-
duce, or are held for the production of,
passive income.
Pursuant to section 1291, certain distri-
butions by a PFIC and gains recognized
on dispositions of its stock included in the
income of the PFIC shareholder generally
are subject to ordinary income treatment
and an interest charge (excess distribu-
tion rules). A PFIC shareholder may avoid
the excess distribution rules by making
a timely election under section 1295 to
treat a PFIC as a QEF (a QEF election), in
which case the PFIC shareholder will take
into account annually its pro rata share of
the ordinary earnings and net capital gain
of the PFIC under section 1293.
Under section 1295(a), a PFIC will be
treated as a QEF with respect to a PFIC
shareholder if the shareholder makes a QEF
election and the PFIC complies with the
requirements prescribed by the Secretary
for purposes of (i) determining the ordinary
earnings and net capital gain of the PFIC
and (ii) otherwise carrying out the purpose
of the PFIC provisions. Section 1295(b)(1)
provides that a PFIC shareholder may make
a QEF election with respect to a PFIC for
any taxable year of the PFIC shareholder.
Once made, the election will apply to that
year and to all subsequent years of the
PFIC shareholder unless revoked with the
consent of the Secretary. Section 1295(b)
(2) prescribes the time for making the elec-
tion. In general, for the QEF election to
be applicable to a taxable year, the PFIC
shareholder must make the election by the
due date, as extended under section 6081,
for the PFIC shareholder’s return for that
taxable year (election due date).
If a PFIC shareholder makes a QEF
election that is effective the first taxable
year in which the PFIC shareholder held
stock in that PFIC, the PFIC shareholder
is not subject to the excess distribution
rules with respect to the PFIC (such QEF,
a pedigreed QEF). Further, a pedigreed
QEF with respect to a PFIC shareholder

Bulletin No. 2026–4 395 January 20, 2026
will not be treated as a QEF for any tax-
able year in which the foreign corpora-
tion is not a PFIC under section 1297(a),
and the PFIC shareholder is not required
to take into account under section 1293
its pro rata share of the foreign corpora-
tion’s ordinary earnings and net capital
gain for such year or to satisfy the sec-
tion 1295 annual reporting requirements
for such year. However, if a PFIC share-
holder makes a QEF election for any
year after the first taxable year in which
the foreign corporation was a PFIC with
respect to the shareholder, then that stock
continues to be treated as PFIC stock
under section 1298(b)(1) (often referred
to as the “once a PFIC, always a PFIC”
rule), and the PFIC shareholder contin-
ues to be subject to the excess distribu-
tion rules in addition to the QEF rules
after the PFIC shareholder makes the
QEF election (such QEF, an unpedigreed
QEF). Under Treas. Reg. §§ 1.1291-9
and 1.1291-10, a PFIC shareholder may
purge the PFIC taint in this circumstance
and make the PFIC a pedigreed QEF with
respect to the PFIC shareholder by elect-
ing to recognize gain on a deemed sale of
its PFIC stock or, in the case of a PFIC
that is also a controlled foreign corpora-
tion (as defined in section 957(a)), elect-
ing to recognize a deemed dividend from
the PFIC, while simultaneously making a
QEF election.
Under Treas. Reg. § 1.1295-1(f)(1), a
PFIC shareholder makes a QEF election
by: (i) properly completing a Form 8621,
Information Return by a Shareholder of
a Passive Foreign Investment Company
or Qualified Electing Fund; (ii) attach-
ing Form 8621 to its Federal income tax
return filed by the election due date for the
PFIC shareholder’s election year; and (iii)
receiving, and reflecting in Form 8621, the
information provided in the PFIC Annual
Information Statement described in Treas.
Reg. § 1.1295-1(g)(1), the Annual Inter-
mediary Statement described in Treas.
Reg. § 1.1295-1(g)(3), or the applicable
combined statement described in Treas.
Reg. § 1.1295-1(g)(4) (a Combined State-
ment) for the taxable year of the PFIC
ending with or within the taxable year for
which Form 8621 is being filed. Further,
if the PFIC Annual Information Statement
contains a statement that the foreign corpo-
ration has permitted the PFIC shareholder
to examine the books of account, records,
and other documents of the foreign corpo-
ration for the PFIC shareholder to calcu-
late the amounts of the PFIC’s ordinary
earnings and net capital gain according
to Federal income tax accounting princi-
ples and to calculate the PFIC sharehold-
er’s pro rata shares of those amounts (as
described in Treas. Reg. § 1.1295-1(g)(1)
(ii)(C)), the PFIC shareholder must attach
a statement to Form 8621 that indicates
that the PFIC shareholder, not the PFIC,
calculated the PFIC’s ordinary earnings
and net capital gain.
.02 Retroactive QEF Elections.
Section 1295(b)(2) provides that, to
the extent permitted under regulations, a
PFIC shareholder may make a QEF elec-
tion for a taxable year after the election
due date (retroactive QEF election) if the
PFIC shareholder fails to make a timely
election because the PFIC shareholder
reasonably believed that the foreign cor-
poration was not a PFIC. Thus, if eligible,
a PFIC shareholder may make a QEF elec-
tion retroactive to the first taxable year in
which that PFIC shareholder held stock of
that PFIC and, as a result, the PFIC would
be a pedigreed QEF with respect to the
PFIC shareholder.
Treas. Reg. § 1.1295-3 provides two
sets of rules for making a retroactive QEF
election, which are the exclusive rules
under which a PFIC shareholder may
make a retroactive QEF election. Relief
for failure to make a timely QEF election
is therefore not available under any other
provision of law, including under Treas.
Reg. §§ 301.9100-1 through -3.
Under the first set of rules, as provided
under Treas. Reg. § 1.1295-3(b) (protec-
tive regime), to make a retroactive QEF
election, a PFIC shareholder must have:
(i) reasonably believed, as of the election
due date, that the foreign corporation was
not a PFIC for its taxable year that ended
during the retroactive election year; (ii)
filed a protective statement applicable to
the retroactive election year with respect
to the foreign corporation as described
in Treas. Reg. § 1.1295-3(b)(2); and (iii)
complied with the other terms and condi-
tions of the protective statement. Treas.
Reg. § 1.1295-3(e) provides special rules
for certain minority PFIC shareholders to
meet the reasonable belief requirement
under Treas. Reg. § 1.1295-3(b)(1).
Under the second set of rules, as pro-
vided under Treas. Reg. § 1.1295-3(f), a
PFIC shareholder that has not satisfied
the requirements of the protective regime
under Treas. Reg. § 1.1295-3(b) or (e)
may request consent of the Commissioner
to make a retroactive QEF election. Under
Treas. Reg. § 1.1295-3(f)(1), the Com-
missioner will grant relief only if (i) the
PFIC shareholder reasonably relied on a
qualified tax professional, (ii) granting
consent will not prejudice the interests of
the United States government (see section
4.02(3) of this revenue procedure), (iii)
the PFIC shareholder requests consent
before the IRS raises upon audit the PFIC
status of the corporation for any taxable
year of the PFIC shareholder, and (iv) the
PFIC shareholder satisfies certain proce-
dural requirements for obtaining relief.
Treas. Reg. § 1.1295-3(f)(2) sets forth
rules for determining whether a PFIC
shareholder reasonably relied on a quali-
fied tax professional, including that a PFIC
shareholder is deemed to have reasonably
relied on a qualified tax professional only
if the PFIC shareholder reasonably relied
on a qualified tax professional (including
a tax professional employee of the PFIC
shareholder) who failed to identify the
foreign corporation as a PFIC or failed to
advise the PFIC shareholder of the con-
sequences of making, or failing to make,
a QEF election. See section 4.02(2)(e) of
this revenue procedure for more detail
regarding the statement of facts that a
PFIC shareholder must provide in connec-
tion with these rules.
.03 Requesting IRS Consent to Make a
Retroactive QEF Election.
Treas. Reg. § 1.1295-3(f)(4) provides
that a PFIC shareholder requests consent
to make a retroactive QEF election by
filing a ruling request with the Office of
Associate Chief Counsel (International)
(retroactive QEF election ruling request).
The retroactive QEF election ruling
request must satisfy the general require-
ments, including payment of the user fee,
for ruling requests filed with Associate
offices as set forth in Rev. Proc. 2026-1.
The retroactive QEF election ruling
request must include certain affidavits.
Under Treas. Reg. § 1.1295-3(f)(4)(ii),
the ruling request must include a detailed
affidavit from the PFIC shareholder, or
a person authorized to sign a Federal

January 20, 2026 396 Bulletin No. 2026–4
income tax return on behalf of the PFIC
shareholder, describing the events that led
to the failure to make a QEF election by
the election due date, and the discovery
of that failure. The PFIC shareholder’s
affidavit must describe the engagement
and responsibilities of the qualified tax
professional as well as the extent to which
the PFIC shareholder relied on the tax
professional. The PFIC shareholder, or the
individual signing for an entity, must sign
the affidavit under penalties of perjury. An
individual that signs for an entity must
have personal knowledge of the facts and
circumstances at issue.
The retroactive QEF election ruling
request must also include detailed affida-
vits from individuals having knowledge
or information about the events that led
to the failure to make a QEF election
by the election due date and to the dis-
covery of that failure. See Treas. Reg.
§ 1.1295-3(f)(4)(iii). These individuals
must include the qualified tax professional
upon whose advice the PFIC shareholder
relied, as well as any individual (includ-
ing an employee of the PFIC shareholder)
who made a substantial contribution to the
return’s preparation, and any accountant
or attorney, knowledgeable in tax mat-
ters, who advised the PFIC shareholder
regarding its ownership of the stock of the
foreign corporation. Each affidavit must
describe the individual’s engagement and
responsibilities as well as the advice con-
cerning the tax treatment of the foreign
corporation that the individual provided
to the PFIC shareholder. Each affidavit
also must include the individual’s name,
address, and taxpayer identification num-
ber, and must be signed by the individual
under penalties of perjury.
The PFIC shareholder must provide
any additional information requested by
the Commissioner in connection with the
retroactive QEF election ruling request.
See Treas. Reg. § 1.1295-3(f)(4)(iv).
The PFIC shareholder is also required to
notify the branch of the Office of Asso-
ciate Chief Counsel (International) han-
dling the request if, while the request is
pending, the IRS begins an examination of
the PFIC shareholder’s return for the ret-
roactive election year or any subsequent
taxable year during which the PFIC share-
holder holds stock of the foreign corpora-
tion. See Treas. Reg. § 1.1295-3(f)(4)(v).
SECTION 3. INFORMAL PRE-FILING
CONSULTATIONS WITH THE OFFICE
OF ASSOCIATE CHIEF COUNSEL
(INTERNATIONAL)
In the interest of making the retroac-
tive QEF election ruling request process
more effective and efficient, the Office of
Associate Chief Counsel (International)
invites PFIC shareholders and their rep-
resentatives to contact the Office of Asso-
ciate Chief Counsel (International) for an
informal consultation in connection with
determining whether to file a request.
The consultation may include procedural
or substantive issues. Statements or rep-
resentations made by the Office of Asso-
ciate Chief Counsel (International) in an
informal consultation are not binding on
the IRS. The requirements set forth in sec-
tion 10 of Rev. Proc. 2026-1 with respect
to conferences and pre-submission con-
ferences do not apply to informal con-
sultations under section 3 of this revenue
procedure. Inquiries and informal consul-
tation requests may be sent to CC.INTL.
RetroQEF.PLR@irscounsel.treas.gov
or made to the Office of Associate Chief
Counsel (International) by phone at (202)
317-6934 (not a toll-free call).
Conferences and pre-submission con-
ferences described in section 10 of Rev.
Proc. 2026-1 remain available to PFIC
shareholders.
SECTION 4. PROCEDURES FOR
FILING RETROACTIVE QEF
ELECTION RULING REQUESTS
.01 General. This section sets forth
certain procedures, rules, and guidelines
relevant to filing a request for consent to
make a retroactive QEF election. A check-
list summarizing the requirements is pro-
vided in the Appendix.
.02 Procedures.
(1) User fees.
(a) General rules. All retroactive QEF
election ruling requests must be accompa-
nied by the appropriate user fee as deter-
mined from the fee schedule provided in
Appendix A to Rev. Proc. 2026-1. See sec-
tion 15.02 of Rev. Proc. 2026-1. If a request
is not matched with full payment, the IRS
will exercise discretion in deciding whether
to immediately return the request. See sec-
tion 15.09 of Rev. Proc. 2026-1.
In general, the user fee amount pro-
vided in paragraph (A)(3)(c)(ii) of Appen-
dix A to Rev. Proc. 2026-1 (“[a]ll other
letter ruling requests” not otherwise iden-
tified in paragraph (A)(3) of Appendix
A) applies to a retroactive QEF election
ruling request. See section 4.02(1)(b) of
this revenue procedure for the availabil-
ity of reduced user fees in certain cases.
The user fee amount provided in para-
graph (A)(3)(c)(i) of Appendix A to Rev.
Proc. 2026-1 (user fee for ruling requests
for relief under Treas. Reg. § 301.9100-3
or section 1362(b)(5)) does not apply to
a retroactive QEF election ruling request.
A separate user fee is required for each
PFIC for which a PFIC shareholder is
seeking consent to make a retroactive QEF
election. See Treas. Reg. § 1.1295-3(f)
(4). For example, if a PFIC shareholder
requests letter rulings for consent to make
retroactive QEF elections with respect to
three PFICs in a single submission, such
submission must be accompanied by pay-
ment of three separate user fees as pro-
vided in Appendix A to Rev. Proc. 2026-1.
As described in section 4.02(1)(b) of this
revenue procedure, reduced user fees may
be available to PFIC shareholders in some
cases, and a PFIC shareholder may gen-
erally pay the lowest user fee available
to such PFIC shareholder as provided in
Appendix A to Rev. Proc. 2026-1.
(b) Reduced user fees.
(i) Substantially identical letter ruling
requests.
A PFIC shareholder requesting multi-
ple retroactive QEF election rulings may
qualify for reduced user fees as provided
in paragraph (A)(5)(a) of Appendix A to
Rev. Proc. 2026-1 if the requests are for
substantially identical rulings. Cf. section
15.07 of Rev. Proc. 2026-1. To qualify
for this reduced user fee, all information
and underlying documents must be sub-
stantially identical and all letter ruling
requests must be submitted at the same
time in a single submission. In addition,
the submission must state that the let-
ter ruling requests, all information, and
underlying documents are substantially
identical, and must specifically iden-
tify the extent to which the letter ruling
requests, information, and underlying
documents are not identical. The IRS
will generally treat additional retroactive
QEF election ruling requests in a single

Bulletin No. 2026–4 397 January 20, 2026
submission regarding multiple PFICs as
substantially identical rulings if the facts
and circumstances that led to the failure
to make the elections and the discovery of
such failure are substantially similar, even
though the stock of each PFIC may have
been acquired by the PFIC shareholder
in different years and the calculations of
the PFIC shareholder’s potential QEF
inclusion amounts under section 1293(a)
for each PFIC may be different. For this
purpose, the IRS generally will treat the
fact that a tax advisor contemporaneously
discovered the PFIC status of multiple
foreign corporations owned by a PFIC
shareholder as evidencing that the failures
to make QEF elections and the discovery
of such failures are based on substantially
similar facts and circumstances.
Example. At different times, a taxpayer
purchased stock in three foreign corpora-
tions that are PFICs (FC1, FC2, and FC3)
and relied on a tax advisor who failed to
identify the foreign corporations as PFICs.
After the PFIC shareholder hired a new
tax advisor, the new tax advisor discov-
ered contemporaneously that each of FC1,
FC2, and FC3 qualify as PFICs. Because
the new tax advisor discovered that all
three foreign corporations are PFICs con-
temporaneously, if (1) the PFIC share-
holder otherwise meets the requirements
to submit retroactive QEF election ruling
requests and (2) the PFIC shareholder
makes a single, simultaneous submission
with respect to all three PFICs, then the
PFIC shareholder must pay the full user
fee for the first ruling with respect to
FC1 (to treat FC1 as a QEF) as provided
in paragraph (A)(3)(ii) of Appendix A to
Rev. Proc. 2026-1 (assuming paragraph
(A)(4)(a) and (b) of Appendix A to Rev.
Proc. 2026-1 do not apply; see section
4.02(1)(b)(ii) of this revenue procedure)
and is eligible to pay the reduced user fees
for substantially identical rulings with
respect to each of FC2 and FC3.
(ii) Reduced user fees based on gross
income. Reduced user fees may apply if
a PFIC shareholder’s “gross income” (as
determined under paragraphs (B)(2), (3),
(4), and (5) of Appendix A to Rev. Proc.
2026-1) as reported on the PFIC share-
holder’s last Federal income tax return (as
amended) filed for a full (12-month) taxable
year ending before the date the request is
filed is less than certain amounts. Two dif-
ferent reduced user fee amounts are avail-
able depending on the PFIC shareholder’s
gross income. See paragraph (A)(4)(a) and
(b) of Appendix A to Rev. Proc. 2026-1.
PFIC shareholders seeking a reduced user
fee based on their gross income must attach
a certification as provided in paragraph (B)
(1) of Appendix A to Rev. Proc. 2026-1.
(iii) Lowest available user fee. A PFIC
shareholder may generally pay the lowest
user fee available to the PFIC shareholder
as provided in Appendix A to Rev. Proc.
2026-1.
Example. On June 30, 2026, a PFIC
shareholder requests letter rulings for con-
sent to make retroactive QEF elections with
respect to four PFICs in a single, simulta-
neous submission. The PFIC shareholder is
eligible to pay reduced user fees either for
substantially identical letter rulings as pro-
vided in paragraph (A)(5)(a) of Appendix
A to Rev. Proc. 2026-1 with respect to three
PFICs or based on the PFIC shareholder’s
gross income as provided in paragraph (A)
(4)(a) of Appendix A to Rev. Proc. 2026-1
with respect to all four PFICs. On June 30,
2026, the PFIC shareholder’s total user fee
amount for substantially identical letter rul-
ing requests would be $16,560 (the reduced
user fee of $3,450 based on gross income
with respect to the first PFIC and the sub-
stantially identical letter ruling request user
fee of $4,370 with respect to the remaining
three PFICs). On June 30, 2026, the PFIC
shareholder’s total user fee amount for
four separate ruling requests based on the
PFIC shareholder’s gross income would
be $13,800 (the reduced user fee of $3,450
based on gross income with respect to all
four PFICs). The PFIC shareholder can
choose to treat the four ruling requests as
separate, not substantially identical, and
pay $13,800, the lowest user fee amount
available to such PFIC shareholder. None-
theless, only one submission that recites all
the relevant facts and representations with
respect to all four PFICs is necessary. See
Appendix A to Rev. Proc. 2026-1.
(c) User fee rate codes.
Separate user fee rate codes for retro-
active QEF election ruling requests are
available when PFIC shareholders are
submitting the user fee payments through
www.pay.gov. PFIC shareholders may
select from the following user fee rate
codes for their retroactive QEF election
ruling requests.
User fee rate codeDescription
PLRRRQThe full user fee for a retroactive QEF election ruling
PLRRRQR
The reduced user fee based on gross income as provided in paragraph (A)(4)(a) of Appendix A to Rev.
Proc. 2026-1
PLRRRQR1M
The reduced user fee based on gross income as provided in paragraph (A)(4)(b) of Appendix A to Rev.
Proc. 2026-1
PLRRRQM
The reduced user fee for a substantially identical ruling as provided in paragraph (A)(5)(a) of Appendix
A to Rev. Proc. 2026-1
A retroactive QEF election ruling
request must include a statement indicat-
ing the relevant user fee rate codes on the
first page of the submission. If the sub-
mission is accompanied by reduced user
fees as provided in paragraph (A)(4)(a) or
(b), or (5)(a) of Appendix A to Rev. Proc.
2026-1, the statement or certification must
explain why the submission qualifies for
the reduced user fees.
(2) Items to include with retroactive
QEF election ruling submission. With
respect to each PFIC in a retroactive QEF
election ruling submission, a PFIC share-
holder must include the following docu-
ments and information:
(a) a statement listing the dates on which
the PFIC shareholder acquired each
interest in the foreign corporation,
the PFIC shareholder’s ownership
percentage of the foreign corporation

January 20, 2026 398 Bulletin No. 2026–4
immediately after acquiring each inter-
est, and the first taxable year of the for-
eign corporation ending with or within
a taxable year of the PFIC shareholder
for which the retroactive QEF election
is requested to be in effect;
(b) PFIC Annual Information Statements
(or Intermediary Statements or Com-
bined Statements, as applicable) for
each taxable year of the PFIC ending
with or within a taxable year of the
PFIC shareholder for which the retro-
active QEF election is requested to be
in effect, if available;
(c) a detailed affidavit from the PFIC
shareholder, or a person authorized to
sign a Federal income tax return on
behalf of the PFIC shareholder, meet-
ing the requirements of Treas. Reg. §
1.1295-3(f)(4)(ii);
(d) detailed affidavits from other per-
sons prescribed by and meeting the
requirements of Treas. Reg. § 1.1295-
3(f)(4)(iii), including the qualified
tax professional upon whose advice
the PFIC shareholder relied, as well
as any individual (including an
employee of the PFIC shareholder)
who made a substantial contribution
to the return’s preparation, and any
accountant or attorney, knowledge-
able in tax matters, who advised the
PFIC shareholder with regard to their
ownership of the stock of the for-
eign corporation. The IRS may in its
discretion deem the requirement to
obtain such an affidavit satisfied in
certain situations in which the PFIC
shareholder has exhausted all reason-
able means to obtain such affidavit
and the affidavit is unavailable, such
as a PFIC shareholder that is unable
to obtain an affidavit from a qual-
ified tax professional upon whose
advice the PFIC shareholder relied
because the qualified tax professional
is deceased and their records are
unavailable. A PFIC shareholder that
is unable to obtain such an affidavit is
strongly encouraged to seek informal
consultation with the Office of Asso-
ciate Chief Counsel (International)
before filing the ruling request as
described in section 3 of this revenue
procedure.
(e) a statement of facts (including any
supporting documentation) demon-
strating that in preparing their income
tax return for the taxable year with
respect to which the PFIC share-
holder is requesting consent to make
a retroactive QEF election—
(i) the PFIC shareholder reasonably
relied on a qualified tax profes-
sional (including a tax profes-
sional employed by the PFIC
shareholder) and—
1. the tax professional failed to
identify the foreign corpo-
ration as a PFIC or failed to
advise the PFIC shareholder
of the consequences of mak-
ing, or failing to make, the
QEF election; and
2. the PFIC shareholder did not
know and did not have rea-
son to know that the qual-
ified tax professional was
not competent to render tax
advice with respect to the
ownership of shares of a for-
eign corporation or did not
have access to all relevant
facts and circumstances;
(ii) the PFIC shareholder did not
ignore the advice of a qualified
tax professional that the foreign
corporation was a PFIC and
of the availability of the QEF
election and related tax conse-
quences; and
(iii) the PFIC shareholder otherwise
did not know or have reason to
know that the foreign corpora-
tion was a PFIC and of the avail-
ability of a QEF election; and
(f) a representation that, as of the time of
the filing of the retroactive QEF elec-
tion ruling request, a representative
of the IRS has not raised on audit the
PFIC status of the foreign corpora-
tion for any taxable year of the PFIC
shareholder.
(3) Post-submission process and preju-
dice determination. Upon receipt of a PFIC
shareholder’s retroactive QEF election rul-
ing submission with the correct user fee
(see section 4.02(1) of this revenue pro-
cedure), the IRS will conduct a technical
review to determine whether such PFIC
shareholder satisfies the requirements of
Treas. Reg. § 1.1295-3(f). An important
determination in this review is whether
granting consent would prejudice the inter-
ests of the United States government under
Treas. Reg. § 1.1295-3(f)(3).
Except as otherwise provided in Treas.
Reg. § 1.1295-3(f)(3)(ii) (entry into a
closing agreement to eliminate prejudice),
consent for a retroactive QEF election
will not be granted if it would prejudice
the interests of the United States govern-
ment. Under Treas. Reg. § 1.1295-3(f)
(3)(i), the interests of the United States
government are prejudiced if granting
relief would result in the PFIC share-
holder having a lower tax liability, taking
into account applicable interest charges,
in the aggregate for all years affected by
the retroactive QEF election (other than
by a de minimis amount) than the PFIC
shareholder would have had if the PFIC
shareholder had made a QEF election by
the election due date. The time value of
money is taken into account for purposes
of this computation.
In determining whether a retroactive
QEF election will prejudice the interests
of the United States government, the IRS
will generally rely on the PFIC Annual
Information Statements (or Intermediary
Statements or Combined Statements, as
applicable) for each taxable year of the
PFIC ending with or within a taxable
year of the PFIC shareholder for which
the retroactive QEF election is requested
to be in effect that are provided by the
PFIC shareholder with the submission. If
PFIC Annual Information Statements (or
Intermediary Statements or Combined
Statements, as applicable) are not avail-
able or do not provide sufficient infor-
mation for one or more taxable years of
the PFIC ending with or within a taxable
year of the PFIC shareholder for which
the retroactive QEF election is requested
to be in effect, the PFIC shareholder must
provide other information (including any
supporting documentation) sufficient to
demonstrate that granting relief would not
prejudice the interests of the United States
government.
In all cases, regardless of whether
PFIC Annual Information Statements (or
Intermediary Statements or Combined
Statements, as applicable) are available,
the prejudice determination requires PFIC
shareholders to provide information suffi-
cient for the IRS to: (1) review the accu-
racy of the PFIC shareholder’s proposed
QEF inclusion calculation under section

Bulletin No. 2026–4 399 January 20, 2026
1293(a) for all years that would be cov-
ered by the election; and (2) accurately
compute the PFIC shareholder’s tax lia-
bility for such years if a QEF election had
been timely made. In order to complete
its determination, the IRS generally will
issue one or more prejudice determination
information requests to the PFIC share-
holder setting forth information to be pro-
vided by the PFIC shareholder to the IRS.
(4) Prejudice determination informa-
tion requests. Section 4.02(5) of this reve-
nue procedure provides a sample informa-
tion list containing items that the IRS will
typically request to establish that a retro-
active QEF election would not prejudice
the interests of the United States govern-
ment under Treas. Reg. § 1.1295-3(f)(3).
Information requests may also include any
other information the IRS requests pursu-
ant to Treas. Reg. § 1.1295-3(f)(4)(iv).
PFIC shareholders should provide this
information only upon IRS request and do
not need to include such information with
the submission of a retroactive QEF elec-
tion ruling request because the information
requested by the IRS may vary depending
on the facts and circumstances of the rul-
ing request. All information provided pur-
suant to such an IRS request must comply
with the requirements of section 8.05 of
Rev. Proc. 2026-1, including the require-
ment to submit such information within 21
days from the date of the request unless an
extension of time is granted. Accordingly,
the IRS strongly encourages PFIC share-
holders to review the items in the sample
information list prior to submitting a ret-
roactive QEF election ruling request and
be prepared to respond to similar requests.
(5) Sample information list. Information
that the IRS typically requests for each PFIC
for which a retroactive QEF election ruling
request is made to establish whether grant-
ing consent would prejudice the interests of
the United States government includes the
items listed in paragraphs (a) through (e) of
this section 4.02(5). Responses should gen-
erally be accompanied by supporting docu-
mentation demonstrating that the informa-
tion provided is true, correct, and complete
in all respects, which documentation may
include audited financial statements of the
PFIC for each taxable year of the PFIC
ending with or within a taxable year of the
PFIC shareholder for which the retroactive
QEF election is requested to be in effect.
(a) Ownership and PFIC status. For each
taxable year of the foreign corpora-
tion ending with or within a taxable
year of the PFIC shareholder for
which the retroactive QEF election is
requested to be in effect, confirmation
(including supporting computations)
whether the foreign corporation qual-
ified or did not qualify as a PFIC
under section 1297(a).
(b) Computations in absence of PFIC
Annual Information Statement (or
Intermediary Statement or Com-
bined Statement, as applicable). For
each taxable year of the PFIC ending
with or within a taxable year of the
PFIC shareholder for which the ret-
roactive QEF election is requested
to be in effect and for which a PFIC
Annual Information Statement (or
Intermediary Statement or Combined
Statement, as applicable) either is
not available or does not provide suf-
ficient information to calculate the
PFIC shareholder’s pro rata share of
the PFIC’s ordinary earnings and net
capital gain:
(i) Earnings and profits computa-
tions of the PFIC as described in
section 1293(e)(3) that include
any amounts that, when dis-
tributed, can be excluded from
the PFIC shareholder’s gross
income under section 1293(c).
If these amounts have not been
calculated by the PFIC, the IRS
may in its discretion permit reli-
ance on a PFIC shareholder’s
computations of these amounts
based on the PFIC’s audited
financial statements. An exam-
ple of the general process to
compute earnings and profits
of a foreign corporation using
audited financial statements is
the current year earnings and
profits calculation for foreign
corporations on Schedule H of
Form 5471.
(ii) Net capital gain computations of
the PFIC.
(c) Distributions from the PFIC. For each
taxable year of the PFIC shareholder
for which the retroactive QEF elec-
tion is requested to be in effect, the
amount of cash and the fair market
value of any property distributed or
deemed distributed by the foreign
corporation to the shareholder.
(d) Income inclusions.
(i) A detailed description of any
income with respect to the
PFIC previously reported on the
PFIC shareholder’s tax returns,
whether recognized under sec-
tion 1291 or otherwise. The
description should include details
such as: the taxable year of the
income inclusion, the amount of
the income inclusion, the char-
acter of the income inclusion, a
general accounting description
of the type of income, and con-
firmation whether such income
was recognized under section
1291(a).
(ii) A detailed description of any
income with respect to the PFIC
that was not previously reported
on the PFIC shareholder’s tax
returns. The description should
include details such as: the tax-
able year in which the income
was realized, the amount of the
income, character of the income,
a general accounting description
of the type of income, and an
explanation of why the income
was not reported.
(e) Computations of the PFIC share-
holder’s potential QEF income inclu-
sions under section 1293(a) or draft
amended tax returns reflecting the
potential QEF income inclusions and
associated tax liability with respect to
the PFIC for each taxable year of the
PFIC shareholder for which the ret-
roactive QEF election is requested to
be in effect in which the PFIC share-
holder would have QEF inclusions
under section 1293(a) if the request
were granted.
Examples.
Example 1. Sufficient financial state-
ment data. A PFIC and a PFIC share-
holder both have calendar taxable years.
The PFIC shareholder acquired stock of
the PFIC in tax year 1 and did not make
a timely QEF election with respect to
the PFIC. In tax year 4, after the PFIC
shareholder has already filed their return
for tax year 3, the PFIC shareholder
submits a ruling request to make a ret-
roactive QEF election pursuant to Treas.

January 20, 2026 400 Bulletin No. 2026–4
Reg. § 1.1295-3(f), effective in tax year
1. The PFIC shareholder includes a PFIC
Annual Information Statement from the
PFIC for tax year 3 with its submission
and the PFIC Annual Information State-
ment provides sufficient information to
calculate the PFIC shareholder’s pro rata
share of the PFIC’s ordinary earnings and
net capital gain for tax year 3. However,
PFIC Annual Information Statements are
not available for each of tax years 1 and
2. In response to a subsequent IRS prej-
udice determination information request,
the PFIC shareholder provides the PFIC’s
audited financial statements for each of
tax years 1 and 2 that are sufficient to
calculate the PFIC shareholder’s pro rata
share of the PFIC’s ordinary earnings and
net capital gain. The unavailability of
PFIC Annual Information Statements for
each of tax years 1 and 2 will not cause
the PFIC shareholder to be ineligible to
make a retroactive QEF election effective
in tax year 1.
Example 2. Insufficient financial state-
ment data. The facts are the same as exam-
ple 1, except that the PFIC’s audited finan-
cial statements for each of tax years 1 and
2 are not sufficient to calculate the PFIC
shareholder’s pro rata share of the PFIC’s
ordinary earnings and net capital gain for
each of tax years 1 and 2. Therefore, the
PFIC shareholder is not eligible to make
a retroactive QEF election effective in
tax year 1 or tax year 2. The PFIC share-
holder may be eligible to make a retroac-
tive QEF election effective in tax year 3,
though such an election would result in an
unpedigreed QEF unless accompanied by
a deemed sale or deemed dividend elec-
tion pursuant to Treas. Reg. §§ 1.1291-9
or 1.1291-10.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective for
all ruling requests received on or after Jan-
uary 20, 2026.
SECTION 6. PAPERWORK
REDUCTION ACT
The Paperwork Reduction Act of
1995 (44 U.S.C. §§ 3501-3520) generally
requires that a Federal agency obtain the
approval of the Office of Management and
Budget (OMB) before collecting informa-
tion from the public, whether such collec-
tion of information is mandatory, voluntary,
or required to obtain or retain a benefit. An
agency may not conduct or sponsor, and a
person is not required to respond to, a col-
lection of information unless it displays a
valid control number assigned by the OMB.
This revenue procedure mentions
the collections of information in Treas.
Reg. § 1.1295-3 and Rev. Proc. 2026-1.
The collections of information in Treas.
Reg. § 1.1295-3 and Rev. Proc. 2026-1
have been reviewed and approved by the
OMB under control numbers 1545-1555
and 1545-1522, respectively. This reve-
nue procedure does not change or create
new collection requirements not already
approved by the OMB.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue tax law. Generally, tax returns and
tax return information are confidential, as
required by section 6103.
SECTION 7. DRAFTING
INFORMATION
The principal authors of this revenue
procedure are Alfred H. Bae and Jee Hyun
Park of the Office of Associate Chief
Counsel (International). For further infor-
mation regarding this revenue procedure
contact Mr. Bae or Ms. Park at (202) 317-
6934 (not a toll-free call).

Bulletin No. 2026–4 401 January 20, 2026
APPENDIX
CHECKLIST FOR RETROACTIVE QEF RULING REQUESTS
User Fees
 A separate user fee for each PFIC for which the PFIC shareholder seeks consent to file a retroactive QEF election.
(a) General User Fee (Section 4.02(1)(a) of this revenue procedure, see also paragraph (A)(3)(c)(ii) of Appendix A to Rev. Proc.
2026-1)
(b) Reduced User Fees (Section 4.02(1)(b) of this revenue procedure)
(i) Substantially identical letter ruling requests (see also paragraph (A)(5)(a) of Appendix A to Rev. Proc. 2026-1)
(ii) Reduced user fees based on gross income (see also paragraph (A)(4)(a) and (b) of Appendix A to Rev. Proc. 2026-1)
(iii) Lowest available user fee (see also Appendix A to Rev. Proc. 2026-1)
 A ruling request must include a statement indicating the relevant user fees with respect to each PFIC on the first page of the
submission, including, as applicable, a description of why the submission qualifies for reduced user fees.
Items to include with retroactive QEF election ruling submission
 A statement listing the dates on which the PFIC shareholder acquired each interest in the PFIC and the PFIC shareholder’s own-
ership percentage of the PFIC after acquiring each interest (Section 4.02(2)(a) of this revenue procedure)
 PFIC Annual Information Statements (or Intermediary Statements or Combined Statements) (Section 4.02(2)(b) of this revenue
procedure)
 A detailed affidavit from the PFIC shareholder, or a person authorized to sign a Federal income tax return on behalf of the PFIC
shareholder, meeting the requirements of Treas. Reg. § 1.1295-3(f)(4)(ii)
 Detailed affidavits from other persons (as described in Section 4.02(2)(d) of this revenue procedure)
 A statement of facts and supporting documentation (as described in Section 4.02(2)(e) of this revenue procedure)
 A representation that the PFIC status of the corporation has not been raised on audit (Section 4.02(2)(f) of this revenue proce-
dure)

January 20, 2026 402 Bulletin No. 2026–4
Part IV
Claims under § 6435 for
Tax Paid on Dyed Fuel
Announcement 2026-1
This announcement provides import-
ant information for interested taxpay-
ers and potential claimants regarding
claims under § 6435 of the Internal
Revenue Code (Code) for tax paid on
dyed fuel.
1
SECTION 1. BACKGROUND
Section 70525 of Public Law 119-21,
139 Stat. 282 (July 4, 2025), commonly
known as the One, Big, Beautiful Bill Act
(OBBBA), added § 6435 to the Code to
allow recovery of the amount of § 4081
tax previously paid on diesel fuel and
kerosene that later qualifies as eligible
indelibly dyed diesel fuel or kerosene
(dyed fuel) exempt from § 4081 tax under
§ 4082(a).
More specifically, § 6435 allows a per-
son to claim a payment (without interest)
equal to the amount of § 4081 tax paid
with respect to dyed fuel if the person
establishes to the satisfaction of the Sec-
retary of the Treasury or the Secretary’s
delegate that: (i) the person removed the
dyed fuel from a terminal; (ii) tax was pre-
viously paid under § 4081 (and not cred-
ited or refunded) with respect to the dyed
fuel; and (iii) the dyed fuel is exempt from
§ 4081 tax under § 4082(a). Section 6435
is effective for dyed fuel removed on or
after December 31, 2025.
Although § 6435 is functionally sim-
ilar to other rules providing for excise
tax payments (see for example, §§ 6420,
6421, and 6427(l)), § 6435 differs from
those provisions in that it lacks a direc-
tive to treat the payments as if they
constitute refunds of overpayments of
the underlying tax (cf. §§ 6420(e)(1),
6421(g)(1), and 6427(j)(1)). Further,
the OBBBA does not provide a specific
appropriation for § 6435 payments. The
only existing appropriation for paying §
6435 claims is the general refund appro-
priation, which is available only to the
extent the claimant is the same person
that paid the § 4081 tax to which the
claim relates. See § 6402; 31 U.S.C. §
1324(b)(1). Thus, absent a statutory
change, the Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) lack the author-
ity to pay § 6435 claims to anyone other
than the person that paid § 4081 tax on
the dyed fuel to which the claim relates.
SECTION 2. IMPLEMENTATION OF
§ 6435
The Treasury Department and the
IRS intend to issue guidance related to
§ 6435. The forthcoming guidance will
inform taxpayers that paid § 4081 tax on
diesel fuel or kerosene and later removed
such fuel as dyed fuel of the process for
requesting a refund of such tax.
The Treasury Department and the IRS
anticipate issuing this guidance in early
2026 and request that taxpayers hold any
§ 6435 claims until this guidance is issued.
The IRS will not process any § 6435
claims until such guidance is issued.
SECTION 3. DRAFTING
INFORMATION
The principal author of this announce-
ment is the Office of Associate Chief
Counsel (Energy, Credits, and Excise
Tax). However, other personnel from the
Treasury Department and the IRS par-
ticipated in its development. For further
information regarding this announcement,
call (202) 317-6855 (not a toll-free call).
1
Unless otherwise specified, all “section” or “§” references are to sections of the Code.

Bulletin No. 2026–4 i January 20, 2026
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
applied 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
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling 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 previously
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 rul-
ings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service 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.

January 20, 2026 ii Bulletin No. 2026–4
Numerical Finding List
1
Bulletin 2026–4
Announcements:
2026-01, 2026-04 I.R.B. 402
Notices:
2026-2, 2026-02 I.R.B. 304
2026-3, 2026-02 I.R.B. 307
2026-5, 2026-02 I.R.B. 309
2026-6, 2026-02 I.R.B. 313
2026-1, 2026-04 I.R.B. 365
2026-8, 2026-04 I.R.B. 368
2026-10, 2026-04 I.R.B. 378
Proposed Regulations:
REG-101952-24, 2026-03 I.R.B. 345
REG-110519-25, 2026-03 I.R.B. 353
REG-132251-11; REG-134219-08,
2026-03 I.R.B. 358
Revenue Procedures:
2026-1, 2026-01 I.R.B. 1
2026-2, 2026-01 I.R.B. 119
2026-3, 2026-01 I.R.B. 143
2026-4, 2026-01 I.R.B. 160
2026-5, 2026-01 I.R.B. 258
2026-6, 2026-02 I.R.B. 314
2026-7, 2026-02 I.R.B. 316
2026-8, 2026-04 I.R.B. 380
2026-9, 2026-04 I.R.B. 393
2026-10, 2026-04 I.R.B. 394
Revenue Rulings:
2026-1, 2026-02 I.R.B. 299
2026-2, 2026-03 I.R.B. 342
Treasury Decisions:
10042, 2026-03 I.R.B. 320
10041, 2026-04 I.R.B. 360
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin
2024–52, dated December 22, 2024.

Bulletin No. 2026–4 iii January 20, 2026
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2026–4
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin
2024–52, dated December 22, 2024.

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