On Jan. 16, the Internal Revenue Service (IRS) quietly turned back to a long-stalled program and added new strings. The IRS released Notice 2026-8 and Revenue Procedure 2026-8 and, as of Jan. 20, began accepting new group exemption applications for the first time since mid-2020.

Group exemptions allow a “central” tax-exempt organization to obtain tax-exempt status which can in turn cover multiple related entities, such as chapters, affiliates, schools, ministries, or local units. The group ruling serves as a single IRS determination instead of requiring each entity (chapter, affiliate, ministry, church, etc.) to file its own exemption application. The new guidance keeps that framework but tightens who qualifies, what has to be documented, and how often central organizations must report back to the IRS.

For organizations that already hold a group exemption letter, these changes create a one-year transition period and a January 2027 deadline to bring group structures into compliance.

What Changed in Revenue Procedure 2026-8

Revenue Procedure 2026‑8 replaces group exemption guidance that dates back to 1980. At a high level, the new rules:

• Restart group exemption applications, which must now be filed electronically on Form 8940 through Pay.gov with a user fee that is currently $3,500.
• Establish minimum size requirements for the group: at least five subordinates to obtain a group exemption and at least one to maintain it.
• Set a general expectation that a central organization will maintain only one group exemption letter.
• Define key concepts such as affiliation and “general supervision or control” by central organizations with respect to their subordinates.
• Limit which entities may be added as subordinates and add an annual Supplemental Group Ruling Information (or, “SGRI”) filing for most central organizations.

Central Organizations: Maintaining a Group Exemption

Under a single group exemption letter, all subordinate organizations must be described in the same paragraph of Code Section 501(c). Each subordinate must be affiliated with the central organization as a chapter, local, post, or unit, and must be under the central organization’s general supervision or control. As with determinations under Code Section 501(c) more generally, most group rulings are issued under Code Section 501(c)(3).

Affiliation can be demonstrated by inclusion on a group return, listing in a current directory, or, in the case of churches, common religious bonds or convictions.

General supervision focuses on oversight and education. A central organization must obtain, review, and retain information each year regarding a subordinate’s finances, activities, and compliance with annual filing requirements and must provide written information or education about how to maintain exemption.

Control focuses on governance or contractual authority. A central organization may appoint a majority of the subordinate’s governing board or officers, have substantial overlap in directors or officers, or have contractual rights that give it the ability to direct the subordinate’s activities and operations.

The central organization may rely on either general supervision or control for a particular subordinate but should be able to demonstrate one or the other.

Eligibility of Subordinates

Subordinate organizations that share the same purpose must adopt a purpose statement in their governing documents that mirrors that of the central organization, and any subordinate included in a group return must share the central organization’s tax year. Each central and each subordinate must have its own employer identification number (EIN), and each subordinate must sign a written authorization to be included in the group and to permit removal from the group exemption letter.

Certain entities are ineligible to be subordinates, including:

• Foreign organizations.
• Code Section 501(c)(3) organizations classified as private foundations under Code Section 509(a).
• Code Section 501(c)(3) Type III supporting organizations.
• Code Section 501(c)(29) qualified nonprofit health insurance issuers.
• Organizations that have had their exempt status revoked and not reinstated.

Annual SGRI Reporting

For many central organizations, maintaining a group exemption will now include a recurring reporting obligation. Except where an exception applies, a central organization must:

• File a Supplemental Group Ruling Information (SGRI) update every year, at least 30 days and not more than 90 days before the end of its tax year.
• Report changes in the purposes, character, or operations of subordinate organizations.
• Provide separate lists of subordinates that have been added, removed, automatically revoked, or that have changed name or address.

A central organization that is a church, or a convention or association of churches, may choose to file SGRI but is not required to do so. This exception does not apply to the other structural rules.

Special Considerations for Churches and Religious Organizations

Many religious bodies use group exemptions to cover congregations, ministries, schools, camps, and other related entities. Revenue Procedure 2026-8 includes several points that are especially relevant in that context:

• Affiliation for a subordinate that is a church can be demonstrated through common religious bonds or convictions with the central organization, not just corporate ties.
• For churches and certain church-operated schools that do not file a Form 990 or 990-EZ, a church central organization does not have to obtain and review financial information each year, but must provide annual educational material on how to maintain section 501(c)(3) status.
• Church central organizations are not required to file SGRI, although some may elect to do so for donor and grantor comfort.

Note that compliance with the IRS guidance to be included in the group exemption for a religious body does not necessarily satisfy the requirements applicable to such organizations to adhere to the organization’s religious tenets and care must be given to balance all requirements for such organizations.

Transition Period for Existing Group Exemptions

Central organizations that hold a group exemption letter as of Jan. 20 have a transition period that ends on Jan. 22, 2027. By that date, a central organization must:

• Confirm it has at least one subordinate organization, or if it does not, it must add at least one subordinate or terminate the group exemption ruling.
• If it has more than one group exemption ruling, decide which to retain and terminate the others.
• Determine whether each subordinate that will remain in the group can meet the updated affiliation and general supervision or control standards and remove those that cannot.
• Make sure that all subordinates under a single group exemption letter are described in the same paragraph of Code Section 501(c).

Certain new requirements do not apply to preexisting subordinates. For example, they are not required to adopt uniform purpose statements, and the exclusions for Type III supporting organizations and Code Section 501(c)(29) issuers do not apply to them.

Next Steps for Exempt Organizations

In light of these changes, exempt organizations that use, or are considering, a group exemption should:

• Inventory all entities treated as subordinates, including their Code Section 501(c) classifications, EINs, and tax years.
• Identify any ineligible entities and decide whether to seek reinstatement, restructure, or remove them.
• For each subordinate, determine whether the central organization can demonstrate general supervision or control and whether changes to governing documents, policies, or affiliation or management agreements are needed.
• If SGRI applies, build a simple annual process to capture additions, removals, and changes in time for the filing window.
• For churches and ministries, document how your polity and religious ties satisfy the affiliation and supervision concepts, and decide whether voluntary SGRI filings would be helpful for donors and institutional funders.