Rev. Proc. 2024-5 is the expected annual update that the Internal Revenue Service issues each year regarding procedures for issuing exempt organization (EO) determination letters.
New this year, the IRS may now may issue EO determination letters to tax exempt organizations seeking to change the paragraph under which they qualify for tax exempt status. This applies to organizations currently recognized as described in IRC Section 501(c)(3) that seek recognition as described in a different paragraph of Section 501(c). Previously, the IRS wouldn’t issue a determination under this circumstance.
If an organization wants to be recognized as tax exempt under a different category described in Section 501(c)(3), it must:
- Show that it distributed its assets to another Section 501(c)(3) organization or government entity, and
- Demonstrate that it meets the requirements for the Section 501(c) status in the new category
The new determination letter will be effective as of the submission date of the application.