[Federal Register Volume 77, Number 40 (Wednesday, February 29, 2012)]
[Rules and Regulations]
[Pages 12202-12205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4740]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9581]
RIN 1545-BG60


Public Inspection of Material Relating to Tax-Exempt 
Organizations

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations pertaining to the 
public inspection of material relating to tax-exempt organizations and 
final regulations pertaining to the public inspection of written 
determinations and background file documents. These regulations are 
necessary to clarify rules relating to information and materials made 
available by the IRS for public inspection under the Internal Revenue

[[Page 12203]]

Code (Code). The final regulations affect certain organizations exempt 
from Federal income tax, organizations that were exempt but are no 
longer exempt from Federal income tax, and organizations that were 
denied tax-exempt status.

DATES: Effective Date: These regulations are effective on February 29, 
2012.

FOR FURTHER INFORMATION CONTACT: Mary Ellen Keys, (202) 622-4570 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    This document contains amendments to the Procedure and 
Administration Regulations (26 CFR part 301). Section 6104(a) of the 
Code relates to information pertaining to tax-exempt organizations made 
available by the IRS for public inspection. Section 6110 of the Code 
relates to information pertaining to written determinations made 
publicly available by the IRS.
    These final regulations amend Sec. Sec.  301.6104(a)-1(i) and 
301.6110-1(a) to eliminate the portions of the previous regulations 
that the United States Court of Appeals for the District of Columbia 
Circuit, in Tax Analysts v. IRS, 350 F.3d 100 (D.C. Cir. 2003), held 
violated section 6110 of the Code. Prior to the Tax Analysts decision, 
the IRS relied on those regulations to withhold letter rulings denying 
or revoking tax-exempt status from public inspection under section 
6110. In accordance with the Tax Analysts decision, the IRS now makes 
those letter rulings available for public inspection pursuant to 
section 6110. These final regulations also update Sec.  301.6104(a)-1 
to conform to other current laws and administrative practices.
    The final regulations affect organizations exempt from Federal 
income tax under section 501(a) or section 527, organizations that were 
exempt but are no longer exempt from Federal income tax, and 
organizations that were denied tax-exempt status.
    A notice of proposed rulemaking (REG-116215-07) was published in 
the Federal Register (72 FR 45394-01) on August 14, 2007. One comment 
was received from the public in response to the notice of proposed 
rulemaking. This comment was considered and is available for public 
inspection at www.regulations.gov or upon request. No public hearing 
was requested or held. In this Treasury decision, the proposed 
regulations are adopted as revised in this preamble.

Summary of Comment and Explanation of Changes Made to the Proposed 
Regulation

    The comment suggested that the proposed revisions did not 
accomplish the objective stated in the summary to the notice of 
proposed rulemaking, because Sec.  301.6110-1(a) was not changed. The 
comment urged that Sec.  301.6110-1(a) be revised to delete everything 
after the sentence that concludes ``section 6104,'' which immediately 
precedes the portion of the regulation that the court held violated the 
statute in Tax Analysts. The comment further suggested that, because no 
changes were made to the section 6110 regulations, paragraph (f) of 
Sec.  301.6104(a)-1 should be revised to reflect the decision in Tax 
Analysts. In response to the comment, paragraph (f) of Sec.  
301.6104(a)-1 is revised to explain that negative determinations issued 
to organizations that applied for an exemption from Federal income tax 
are included among the written determinations that are made available 
under section 6110. No changes were made to Sec.  301.6110-1(a) in 
response to the comment because the language in the notice of proposed 
rulemaking and these final regulations already is consistent with the 
substance of the comment.
    These final regulations also include minor, nonsubstantive 
revisions that vary from the text of the proposed regulations. 
Paragraph (a) of Sec.  301.6104(a)-1 of these final regulations is 
revised to make clear that, in the past, some applications were 
destroyed and therefore are not available for inspection. Paragraph 
(c)(4) of Sec.  301.6104(a)-1 of these final regulations is revised to 
include among the information pertaining to an organization's status 
that is open to public inspection under section 6104(a) any letter or 
document issued by the IRS relating to exempt operating foundation 
status under section 4940(d)(2). Also, because the IRS no longer issues 
advance and final rulings, the reference to ``final determination 
letter'' in Sec.  301.6104(a)-1(c)(4) is revised to read 
``determination letter.''

Special Analyses

    It has been determined that these final regulations are not a 
significant regulatory action as defined in Executive Order 12866, as 
supplemented by Executive Order 13563. Therefore, a regulatory 
assessment is not required. It has also been determined that section 
553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does 
not apply to these regulations and, because these regulations do not 
include a collection of information, the Regulatory Flexibility Act (5 
U.S.C. chapter 6) does not apply. Therefore, a regulatory flexibility 
analysis is not required. Pursuant to section 7805(f) of the Code, the 
notice of proposed rulemaking preceding these final regulations was 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comments on its impact on small businesses.

Drafting Information

    The principal author of these final regulations is Mary Ellen Keys, 
Office of the Associate Chief Counsel (Procedure & Administration).

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 continues to read as 
follows:

    Authority:  26 U.S.C. 7805* * *


0
Par. 2. Sec.  301.6104(a)-1 is revised to read as follows:


Sec.  301.6104(a)-1  Public inspection of material relating to tax-
exempt organizations.

    (a) Applications for exemption from Federal income tax, 
applications for a group exemption letter, and supporting documents. If 
the Internal Revenue Service determines that an organization described 
in section 501(c) or section 501(d) is exempt from Federal income tax 
for any taxable year, the application upon which the determination is 
based, together with any supporting documents, shall be open to public 
inspection. Such applications and supporting documents shall be open 
for public inspection even after any revocation of the Internal Revenue 
Service's determination that the organization is exempt from Federal 
income tax. In the past, some applications were destroyed and therefore 
are not available for inspection. For purposes of determining the 
availability for public inspection, a claim for exemption from Federal 
income tax filed to re-establish exempt status after denial thereof 
under the

[[Page 12204]]

provisions of section 503 or 504 (as in effect on December 31, 1969), 
or under the corresponding provisions of any prior revenue law, is 
considered an application for exemption from Federal income tax.
    (b) Notices of status filed by political organizations. If, in 
accordance with section 527(i), an organization notifies the Internal 
Revenue Service that it is a political organization as described in 
section 527, exempt from Federal income tax for any taxable year, the 
notice of status filed by the political organization shall be open to 
public inspection.
    (c) Letters or documents issued by the Internal Revenue Service 
with respect to an application for exemption from Federal income tax. 
If an application for exemption from Federal income tax is filed with 
the Internal Revenue Service after October 31, 1976, and is open to 
public inspection under paragraph (a) of this section, then any letter 
or document issued to the applicant by the Internal Revenue Service 
that relates to the application is also open to public inspection. For 
rules relating to when a letter or document is issued, see Sec.  
301.6110-2(h). Letters or documents to which this paragraph (c) applies 
include, but are not limited to--
    (1) Favorable rulings and determination letters, including group 
exemption letters, issued in response to applications for exemption 
from Federal income tax;
    (2) Technical advice memoranda issued with respect to the approval, 
or subsequent approval, of an application for exemption from Federal 
income tax;
    (3) Letters issued in response to an application for exemption from 
Federal income tax (including applications for a group exemption 
letter) that propose a finding that the applicant is not entitled to be 
exempt from Federal income tax, if the applicant is subsequently 
determined, on the basis of that application, to be exempt from Federal 
income tax; and
    (4) Any letter or document issued by the Internal Revenue Service 
relating to an organization's status as an organization described in 
section 509(a), 4940(d)(2), 4942(j)(3), or 4943(f), including a 
determination letter that the organization is or is not a private 
foundation.
    (d) Requirement of exempt status. An application for exemption from 
Federal income tax (including applications for a group exemption 
letter), supporting documents, and letters or documents issued by the 
Internal Revenue Service that relate to the application shall not be 
open to public inspection before the organization is determined, on the 
basis of that application, to be exempt from Federal income tax for any 
taxable year. If an organization is determined to be exempt from 
Federal income tax for any taxable year, these materials shall not be 
withheld from public inspection on the basis that the organization is 
subsequently determined not to be exempt for any other taxable year.
    (e) Documents included in the term ``application for exemption from 
Federal income tax.'' For purposes of this section--
    (1) Prescribed application form. If a form is prescribed for an 
organization's application for exemption from Federal income tax, the 
application includes the form and all documents and statements that the 
Internal Revenue Service requires to be filed with the form, any 
amendments or revisions to the original application, or any resubmitted 
applications where the original application was submitted in draft form 
or was withdrawn. An application includes an application for 
reinstatement of tax-exempt status after an organization's tax-exempt 
status has been revoked pursuant to section 6033(j). An application 
submitted in draft form or an application submitted and later withdrawn 
is not considered an application.
    (2) No prescribed application form. If no form is prescribed for an 
organization's application for exemption from Federal income tax, the 
application includes the submission by letter requesting recognition of 
tax exemption and any statements or documents as prescribed by Revenue 
Procedure 2011-9, IRB 2011-2 (January 10, 2011), or any successor 
guidance describing procedures for application for exempt status 
pursuant to section 501 and section 521 of the Internal Revenue Code. 
See Sec.  601.601(d)(2)(ii)(b).
    (3) Application for a Group Exemption Letter. The application for a 
group exemption letter includes the letter submitted by or on behalf of 
subordinate organizations that seek exempt status pursuant to a group 
exemption letter and any statements or documents as prescribed by 
Revenue Procedure 80-27, 1980-1 CB 677 (June 20, 1980), and any 
successor guidance. See Sec.  601.601(d)(2)(ii)(b).
    (4) Notice of status filed under section 527(i). For purposes of 
this section, documents included in the term ``notice of status filed 
under section 527(i)'' include--
    (i) Form 8871, ``Political Organization Notice of Section 527 
Status;''
    (ii) Form 8453-X, ``Declaration of Electronic Filing of Notice of 
Section 527 Status;'' and
    (iii) Any other additional forms or documents that the Internal 
Revenue Service may prescribe.
    (f) Material open to public inspection under section 6110. Under 
section 6110, certain written determinations, including negative 
determinations issued to organizations that applied for an exemption 
from Federal income tax, issued by the Internal Revenue Service are 
made available for public inspection. Section 6110 does not apply, 
however, to material that is open to public inspection under section 
6104. See sections 6104(a)(1) and 6110(l)(1).
    (g) Supporting documents defined. For purposes of this section, 
``supporting documents,'' with respect to an application for exemption 
from Federal income tax, means any statement or document not described 
in paragraph (e) of this section that is submitted by the organization 
or group in support of its application prior to a determination 
described in paragraph (a) of this section. Items submitted in 
connection with an application in draft form, or with an application 
submitted and later withdrawn, are not supporting documents. There are 
no supporting documents with respect to Notices of Status filed by 
political organizations.
    (h) Statement of exempt status. For efficient tax administration, 
the Internal Revenue Service may publish, in paper or electronic 
format, the names of organizations currently recognized as exempt from 
Federal income tax, including organizations recognized as exempt from 
Federal income tax under particular paragraphs of section 501(c) or 
section 501(d). In addition to having the opportunity to inspect 
material relating to an organization exempt from Federal income tax, a 
person may request a statement, or the Internal Revenue Service may 
disclose, in response to or in anticipation of a request, the following 
information--
    (1) The subsection and paragraph of section 501 (or the 
corresponding provision of any prior revenue law) under which the 
organization or group has been determined, on the basis of an 
application open to public inspection, to qualify for exemption from 
Federal income tax; and
    (2) Whether an organization or group is currently recognized as 
exempt from Federal income tax.
    (i) Publication of non-exempt status. (1) For publication of the 
notice of the revocation of a determination that an organization is 
described in section 501(c)(3), see section 7428(c).
    (2) For publication of a list including any organization the tax 
exemption of which is revoked for failure to file

[[Page 12205]]

required returns or notices for three consecutive years, see section 
6033(j).
    (3) For publication of notice of suspension of tax exemption of 
terrorist organizations, see section 501(p).
    (j) Withholding of certain information from public inspection. For 
rules relating to certain information contained in an application for 
exemption from Federal income tax and supporting documents that will be 
withheld from public inspection, see Sec.  301.6104(a)-5(a).
    (k) Procedures for inspection. For rules relating to procedures for 
public inspection of applications for exemption from Federal income tax 
and supporting documents, see Sec.  301.6104(a)-6.
    (l) Effective/applicability date. The rules of this section apply 
February 29, 2012.

0
Par. 3. Sec.  301.6110-1 is amended by revising paragraph (a) and 
adding paragraph (d) to read as follows:


Sec.  301.6110-1  Public inspection of written determinations and 
background file documents.

    (a) General rule. Except as provided in Sec.  301.6110-3, relating 
to deletion of certain information, Sec.  301.6110-5(b), relating to 
actions to restrain disclosure, paragraph (b)(2) of this section, 
relating to technical advice memoranda involving civil fraud and 
criminal investigations, and jeopardy and termination assessments, and 
paragraph (b)(3) of this section, relating to general written 
determinations relating to accounting or funding periods and methods, 
the text of any written determination (as defined in Sec.  301.6110-
2(a)) issued pursuant to a request postmarked or hand delivered after 
October 31, 1976, shall be open to public inspection in the places 
provided in paragraph (c)(1) of this section. The text of any written 
determination issued pursuant to a request postmarked or hand delivered 
before November 1, 1976, shall be open to public inspection pursuant to 
section 6110(h) and Sec.  301.6110-6, when funds are appropriated by 
Congress for such purpose. The procedures and rules set forth in 
Sec. Sec.  301.6110-1 through 301.6110-5 and Sec.  301.6110-7 do not 
apply to written determinations issued pursuant to requests postmarked 
or hand delivered before November 1, 1976, unless Sec.  301.6110-6 
states otherwise. There shall also be open to public inspection in each 
place of public inspection an index to the written determinations 
subject to inspection at such place. Each such index shall be arranged 
by section of the Internal Revenue Code, related statute or tax treaty 
and by subject matter description within such section in such manner as 
the Commissioner may from time to time provide. The Commissioner shall 
not be required to make any written determination or background file 
document open to public inspection pursuant to section 6110 or refrain 
from disclosure of any such documents or any information therein, 
except as provided by section 6110 or with respect to a discovery order 
made in connection with a judicial proceeding. The provisions of 
section 6110 shall not apply to material that is open to public 
inspection under section 6104. See section 6110(l)(1).
* * * * *
    (d) Effective/applicability date. The rules of paragraph (a) apply 
February 29, 2012.

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
    Approved: February 15, 2012.
Emily S. McMahon,
Acting Assistant Secretary of the Treasury, Tax Policy.
[FR Doc. 2012-4740 Filed 2-28-12; 8:45 am]
BILLING CODE 4830-01-P