Rev. Proc. 2026-8 introduces significant changes to the rules for obtaining and maintaining group exemption letters. Existing central organizations should review their structures and oversight practices now as transition relief for certain requirements ends January 22, 2027.

Changes for Central Organizations

The prior group exemption framework gave central organizations greater flexibility in structuring their groups and demonstrating oversight. The new rules replace that flexibility with more specific eligibility, relationship, oversight, and annual reporting requirements. 

An organization eligible for the transition period is a central organization with a group exemption letter in existence on January 20, 2026; the relief applies only to subordinate organizations included in that letter on that date. Existing group exemption letters are not grandfathered from these requirements, so central organizations must determine whether their current arrangements satisfy the new standards before the transition relief expires.

Under the new rules, a central organization must:

• Maintain no more than one group exemption letter. 
• Have at least one subordinate organization (five are required to obtain a new letter).
• Ensure that each subordinate organization is affiliated with and subject to the central organization’s general supervision or control.
• Ensure that all subordinate organizations are described in the same paragraph of §501(c), although the central organization may be described in a different one.
• Submit supplemental group ruling information (SGRI) annually, 30 to 90 days before the end of its fiscal year.

Affiliation and Oversight Standards

The affiliation and general supervision or control standards are likely to require the closest review. Affiliation depends on facts and circumstances showing that a subordinate organization is a chapter, local, post, or unit of the central organization. For supervision or control, meeting either standard is sufficient.

Control exists if any one of the following applies:  

1. The central organization appoints the directors or trustees holding a majority of the subordinate organization’s voting power.
2. The central organization appoints a majority of the subordinate organization’s officers.
3. The directors or trustees holding a majority of the subordinate organization’s voting power are also directors or trustees of the central organization.
4. A majority of the subordinate organization’s officers are also officers of the central organization. 
5. A written agreement evidences the central organization’s control over the subordinate organization’s activities and operations.

General supervision requires the central organization to do both of the following annually for each subordinate organization:

1. Provide educational information on maintaining tax-exempt status, including annual filing requirements (electronic delivery is acceptable).  
2. Obtain, review, and retain information on each subordinate organization’s finances, activities, and filing compliance. A copy of Form 990 or Form 990-EZ satisfies this requirement. A copy of Form 990-N does not, so the central organization must obtain that information another way. If a subordinate organization has no annual filing requirement, the central organization is not required to obtain this information - the annual educational information above satisfies the general supervision standard.

Transition Relief and Next Steps

The one-letter limit, one-subordinate minimum, same-paragraph requirement, and affiliation and supervision or control standards take effect for qualifying existing groups after January 22, 2027. Any required action, such as terminating an extra group exemption letter or removing a subordinate that does not qualify, must be completed through an SGRI submission before that date, with 30 days’ notice to any subordinate being removed.

Central organizations should inventory their subordinate organizations, review governance documents and agreements, identify any group exemption letters or subordinates that require action, and confirm that their annual oversight procedures meet the new standards. RubinBrown can help evaluate your group structure, complete required SGRI submissions, and prepare for the transition deadline. 
 

Published: 10/29/2026

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