Temporary Regulations Regarding Public Charity Classification and Advance Ruling Periods Following the Redesign of IRS Form 990
On September 9, 2008, the Internal Revenue Service (the "IRS") issued temporary regulations (the "Temporary Regulations") that (i) substantially revise the rules governing public charities’ advance ruling periods and public support tests, (ii) prescribe a new rule for determining the accounting method used by public charities in calculating public support, and (iii) clarify the rules regarding donor reliance on IRS determination letters. These changes were necessary to implement the recently-redesigned IRS Form 990, "Return of Organization Exempt from Income Tax." They are important to charities that utilize the public support tests and to grantmakers that perform diligence to identify public charities. This memorandum summarizes certain of these changes.