IRS Resumes Group Exemption Rulings: What Healthcare and Other Nonprofit Organizations Need to Know

On January 20, 2026, the Internal Revenue Service (IRS) resumed accepting new applications for group exemption ruling requests by issuing Revenue Procedure (Rev. Proc.) 2026-8. This new guidance ends the moratorium on new applications for group exemption rulings that began in 2020 and introduces new requirements and guidance for applying for and maintaining a group exemption letter.

Healthcare and other not-for-profit organizations considering a group exemption, as well as those already operating under an existing group ruling, should review the new requirements carefully to ensure compliance.

Understanding Group Exemption Rulings

A group exemption ruling allows for a central organization and subordinate organizations to obtain federal income tax exemption under one group exemption letter held by the central organization and extended to its subordinates. A group exemption ruling replaces separate IRS determination letters for each entity joining the group exemption letter.

Moreover, a group exemption ruling allows the group of subordinates to file one consolidated Form 990 rather than separate Forms 990 for each entity. The parent organization (central organization) must still file its own separate Form 990. A group exemption ruling reduces administrative burdens associated with separate Forms 990 and duplicate disclosures and responses in related entity separate Forms 990.

Notable Changes to the Application

The new guidance introduces several significant changes to the application process, including:

Note that the above changes represent only a portion of the new requirements. Organizations should fully review Rev. Proc. 2026-8 before considering a group exemption ruling.

Updates to Standards of Affiliation, General Supervision, Control and Matching Requirements

Affiliation between a central organization and its subordinate organizations must be demonstrated through facts and circumstances showing the subordinates are chapters, units or localities of the central organization.

The central organization must obtain, review and retain financial, annual filings and activities of its subordinates. Note that Federal Form 990-N does not satisfy this requirement. Central organizations must educate subordinates about the requirements to maintain tax-exemption.

A central organization must demonstrate control of its subordinate organizations. This may be demonstrated through the right to appoint the voting board of directors or trustees of the subordinate organizations, shared officers and a written agreement establishing control over the subordinate organizations’ operations.

Subordinates must share the same paragraph of IRS Code Section 501(c), but are no longer required to match the central organization. Subordinates that serve the same purpose must adopt a uniform purpose statement in their governing documents.

Annual Requirements for Maintaining Group Exemption

Beginning in 2026, a central organization granted a group exemption ruling must submit Form 15644, Supplemental Group Ruling Information, annually. Form 15644 updates IRS records on subordinate organizations under the group exemption ruling, adds or removes subordinate organizations, terminates exemptions and provides other updates to the group exemption ruling. A central organization must still submit Form 15644 even when no changes occurred during the year. To maintain compliance, the central organization must file Form 15644 annually with the IRS no earlier than 90 days and no later than 30 days before the end of its annual accounting period by fax to the IRS at (833) 312-5228.

Transition Period for Preexisting Group Exemptions

Preexisting group exemption ruling holders and subordinate organizations are required to comply with the guidance set forth in Rev. Proc. 2026-8 by January 22, 2027, with some exceptions.

Withum’s Group Exemption Recommendations

A group of related tax-exempt organizations that currently do not have a group exemption ruling should assess whether to proceed now that the IRS has resumed rulings under the new requirements. A group exemption ruling has certain advantages and disadvantages that should be considered. Related tax-exempt organizations with a group exemption ruling should review the Revenue Procedure and the new reporting requirements to support ongoing compliance.