Miscellaneous Rules

Organizational changes and exempt status. If your exempt organization changes its legal structure, such as from a trust to a corporation, you must file a new exemption application to establish that the new legal entity qualifies for exemption. If your organization becomes inactive for a period of time but does not cease being an entity under the laws of the state in which it was formed, its exemption will not be terminated. However, unless you are covered by one of the filing exceptions, you will have to continue to file an annual information return during the period of inactivity. If your organization has been liquidated, dissolved, terminated, or substantially contracted, you should file your annual return of information by the 15th day of the 5th month after the change and follow the applicable instructions to the form.

If your organization amends its articles of organization or its internal regulations (bylaws), you should send a conformed copy of these changes to the appropriate EO area manager. (An organization that is covered by a group exemption letter should send two copies of these changes.) If you did not give the IRS a copy of the amendments previously, you may include it when you file Form 990 (or 990-EZ or Form 990-PF), if that return is required.

Change in accounting period. The procedures that an organization must follow to change its accounting period differ for an individual organization and for a central organization that seeks a group change for its subordinate organizations.

Individual organizations that wish to change annual accounting periods generally need only file an information return for the short period indicating that a change is being made. However, if the organization has changed its accounting period within the previous 10 years, it must file Form 1128, Application to Adopt, Change, or Retain a Tax Year. Form 1128 is attached to the short period return. See Revenue Procedure 85-58.

Central organizations may obtain approval for a group change in annual accounting period for their subordinate organizations on a group basis only by filing Form 1128 with the Ogden Service Center. The address is given on page 7 under Information Required Annually. For more information, see Revenue Procedure 76-10, as modified by Revenue Procedure 79-3 or later update.

Form 1128 must be filed by the 15th day of the 5th month following the close of the short period.

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