The IRS has officially reopened the group exemption application process, ending a pause that began in June 2020. Announced in IRS Revenue Procedure 2026‑8 on January 20, 2026, the updated rules modernize how central organizations obtain and manage tax‑exempt status for their subordinate chapters.
Why This Matters: Group exemptions are a valuable tool for nonprofit networks, allowing a central organization to secure tax‑exempt status for multiple subordinate entities under one umbrella—without requiring each chapter or affiliate to file its own exemption application. With operations spanning multiple states or communities, this structure can significantly ease administrative burdens.
Key Highlights from the Updated Guidance
- Minimum Number of Subordinates – To qualify for a group exemption, a central organization must now oversee at least five subordinate organizations.
- Annual Documentation Requirements – Central organizations must maintain updated and accurate information on each subordinate. This requirement can be met by collecting Form 990 or 990‑EZ from each subordinate. However, subordinates filing Form 990‑N must provide additional written information each year as the 990-N no longer satisfies the requirement.
- Electronic Filing Is Now Mandatory – All group exemption applications must be submitted electronically along with all required attachments and supporting documentation to www.pay.gov.
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