By January 22, 2027, central organizations must confirm that each subordinate satisfies the affiliation and supervision or control tests. Organizations that do not qualify must be removed from the group ruling.
New Annual Communication Requirement
Beginning after January 22, 2027, all central organizations—including churches and conventions—must annually communicate with subordinates about how to maintain tax-exempt status.
This rule applies to both existing and new group exemptions.
This requirement can be satisfied simply by providing a link to IRS Publication 1828 or Publication 557. For most denominations, this will be a modest administrative addition rather than a significant compliance hurdle.
Churches remain exempt from mandatory annual reporting to the IRS regarding changes in subordinates. Reporting updates is optional, though it may help donors verify deductibility through the IRS Business Master File.
Attention Advantage Members: This updated section of our online Church & Clergy Tax Guide provides more detailed coverage of the changes. This update also provides a checklist for central organizations to follow, as well as a sample email for communication with subordinate organizations (a requirement for all central organizations to meet starting next January).
Church Law & Tax’s updated section about group exemptions in its online tax guide provides a sample email that central organizations can use to fulfill this annual communication requirement.
Uniform Purpose Statements
One of the most significant changes involves a “uniform purpose statement” requirement for new subordinate organizations joining a group exemption. New subordinates sharing the same purpose must include consistent language in their governing documents.
This requirement does not apply to churches already covered by a group exemption as of the issuance of Revenue Procedure 2026-8. It also does not apply retroactively.
Still, denominations that allow fully autonomous local church governance may face practical challenges in implementing standardized purpose language for new applicants.
Transition and Ongoing Relief
Certain structural requirements must be satisfied by January 22, 2027. After that date, central organizations must fully comply with the new standards.
Churches retain substantial protections. They remain exempt from Form 990 filing, are not subject to financial reporting oversight within the group, and benefit from permanent relief from certain administrative restrictions.
The Bottom Line
Revenue Procedure 2026-8 modernizes group exemption oversight without fundamentally altering church autonomy. The most significant new obligation is an annual educational communication to subordinates beginning in 2027.
With proactive roster reviews and modest administrative planning, most churches and denominational bodies should be well-positioned to maintain—and even expand—their group exemption coverage under the new framework.
