Update: July 20, 2026
The IRS has introduced Form 15644, Supplemental Group Ruling Information, which central organizations must now use to satisfy their annual reporting obligations for subordinate organizations covered by a group exemption letter. The form standardizes the Supplemental Group Ruling Information, or SGRI, process described in Revenue Procedure 2026-8. Generally, Form 15644 must be submitted annually at least 30 days, but no more than 90 days, before the close of the central organization’s annual accounting period.
On January 20, 2026 the IRS released long-awaited guidance on group exemption procedures, marking the first significant update to the program since the issuance of Revenue Procedure 80-27 in 1980. In May 2020, the IRS published notice 2020-36, which contained a proposed revenue procedure to modify and supersede Rev. Proc. 80-27. At that time, the IRS also paused the acceptance of group exemption applications until the guidance could be finalized. Now, with the release of Revenue Procedure 2026-8, the updated guidance has been finalized and the IRS has resumed accepting group exemption applications as of January 20, 2026. Additionally, the IRS issued Notice 2026-08, which provides further context and clarifications regarding the updated group exemption process. This new guidance is critical for all nonprofits seeking to apply for or maintain a group exemption.
What is a Group Exemption Letter?
A group exemption letter allows the IRS to recognize tax-exempt status for multiple subordinate organizations under a parent or “central” organization, rather than requiring each subordinate to apply separately for exemption recognition.
This structure is commonly used by:
- Membership associations with local chapters
- National nonprofits with state or regional affiliates
- Religious or fraternal organizations with local units
- Other nonprofit networks with centralized oversight
Done correctly, group exemption can reduce administrative burden and help standardize compliance across the group. However, it also requires the central organization to take on meaningful responsibility for oversight and reporting.
Key Updates Nonprofit Central Organizations Should Understand
The full notice is detailed, but for most nonprofit groups, these are the changes most likely to affect you.
1) Minimum subordinate requirement remains in place
To receive a group exemption letter, the central organization must have at least five subordinate organizations when applying. The IRS retained this threshold due to the internal administrative burden of processing group applications.
2) One group exemption letter per central organization
Revenue Procedure 2026-8 continues to prohibit a central organization from maintaining more than one group exemption letter. The IRS’s databases are not capable of tracking more than one group exemption letter per central organization and moreover, the IRS believes maintaining more than one group exemption letter adversely affects the central organization’s ability to exercise appropriate supervision and control over its subordinate organizations.
3) More clarity on “general supervision”
One of the IRS’s biggest focus areas is ensuring central organizations truly supervise and educate subordinate organizations.
The final rules clarify that central organizations generally meet the “obtain, review, and retain information” standard by obtaining copies of filed Form 990 or 990-EZ, but a Form 990-N alone does not satisfy this requirement. The revenue procedure requires a central organization to obtain information about subordinate organizations that file Form 990-N in some other manner, such as by requiring additional annual written information from those subordinate organizations.
Central organizations are also required to transmit information regarding how to maintain tax-exempt status under Section 501(c)(3) to its subordinate organizations. The new guidance clarifies that electronic delivery of such information is acceptable and that the required information must be transmitted annually. One way central organizations can meet this new standard is to provide its subordinate organizations an electronic link to the latest version of Publication 557, Tax-Exempt Status for Your Organization.
4) More flexibility around “control”
The IRS expanded the definition of “control” and added flexibility for organizations whose structures do not match a traditional parent-subsidiary model.
Notably, the revenue procedure allows the central organization to establish control through a written agreement evidencing control over the subordinate organization’s activities and operations, though it does not specify the level of control that must be established in the written agreement.
This can be especially helpful for organizations that maintain alternative governance structures or in situations where a central organization cannot establish control by the historical control standard requiring appointments to the board or overlapping board members.
5) Matching requirement
The revenue procedure maintains the matching requirement found in Rev. Proc. 80-27, which requires that all subordinate organizations initially included in, or subsequently added to, a group exemption letter be described in the same paragraph of Section 501(c). Importantly, however, subordinate organizations are not required to be described in the same paragraph of Section 501(c) as their central organization.
6) Annual reporting requirements remain significant
Central organizations must continue providing annual Supplemental Group Ruling Information to maintain their group exemption letters. Beginning in 2026, central organizations are required to use Form 15644, Supplemental Group Ruling Information, to report the required information about their subordinate organizations.
Form 15644 may be used to:
- Update information about subordinate organizations covered by the group exemption
- Add or remove subordinate organizations
- Terminate a group exemption
- Notify the IRS of other changes required under Revenue Procedure 2026-8
Generally, the annual Form 15644 must be submitted at least 30 days, but no more than 90 days, before the close of the central organization’s annual accounting period. A central organization may also submit the form at other times during the year to report updates, such as adding a new subordinate organization.
Certain churches and conventions or associations of churches described in Section 501(c)(3) may submit Form 15644 but are not required to do so.
Additional action step
- Identify the organization’s annual Form 15644 filing window and establish a process for collecting, reviewing, and submitting the required subordinate organization information.
Why this matters for nonprofits
These updates reflect the IRS’s goal of balancing efficient tax administration with the ongoing concern that many small or volunteer-run subordinate organizations may unintentionally drift out of compliance, especially around annual filing obligations.
From a practical perspective, this guidance encourages central organizations to treat group exemption as more than a convenience. It is a compliance program, and it should include:
- Annual data collection (especially for 990-N filers)
- Clear chapter/affiliate expectations
- Documentation and written authorization
- A process for removals and updates
- Training and recurring education
This is especially important because group exemption letters can be terminated or altered if compliance slips at the group level.
Action steps to consider
If you oversee a nonprofit network or are part of an affiliate structure, consider these next steps:
- Confirm whether group exemption is currently in place, and confirm subordinate rosters are current.
- Review affiliate or chapter governance documents to ensure they support supervision/control expectations.
- Implement an annual compliance process for subordinate organizations (particularly 990-N filers).
- Plan ahead for future expansions, including new chapters or entities that may be added.
Note that the IRS has allowed for a one year transition period so all organizations can ensure compliance in a reasonable timeframe. All central organizations and subordinate organizations must comply with all requirements included in Revenue Procedure 2026-8 no later than January 22, 2027.
How ML&R can help
At Maxwell Locke & Ritter, we work with nonprofit organizations across Central Texas and beyond to support compliance, governance, and tax strategy across all stages of the nonprofit lifecycle.
If your organization is considering a group exemption application, restructuring its subordinate network, or strengthening chapter compliance, our team can help you evaluate your current structure and align your documentation and reporting processes with the latest IRS guidance.
