rp-24-22.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

Part III

Administrative, Procedural, and Miscellaneous

26 CFR 1.501(c)(3)-1: Organizations organized and operated for religious, charitable,
scientific, testing for public safety, literary, or educational purposes, or for the prevention
of cruelty to children or animals.

Rev. Proc. 2024-22

SECTION 1. PURPOSE

This revenue procedure obsoletes Rev. Proc. 82-2, 1982-1 C.B. 367, which identified
the State laws and circumstances that the Internal Revenue Service (IRS) previously
concluded would permit an organization to satisfy the requirements of
§ 1.501(c)(3)-1(b)(4) of the Income Tax Regulations.
1
Many of the State laws identified
in Rev. Proc. 82-2 have materially changed, and a revenue procedure cannot be relied
upon to the extent it is predicated on State law and that State law has materially
changed. See Rev. Proc. 89-14, 1989-1 C.B. 814.

1
Unless otherwise specified, all “section” or “§” references are to sections of the Internal Revenue Code
or the Income Tax Regulations (26 CFR part 1).

-2-

SECTION 2. BACKGROUND

.01 To be organized exclusively for one or more exempt purposes described in
§ 501(c)(3), an organization’s assets must be dedicated to an exempt purpose. See
§ 1.501(c)(3)-1(b)(4).
.02 Section 1.501(c)(3)-1(b)(4) provides, in part that:
An organization’s assets will be considered dedicated to an exempt
purpose, for example, if, upon dissolution, such assets would, by reason of
a provision in the organization’s articles or by operation of law, be
distributed for one or more exempt purposes, or to the Federal Government,
or to a State or local government, for a public purpose, or would be
distributed by a court to another organization to be used in such manner as
in the judgment of the court will best accomplish the general purposes for
which the dissolved organization was organized. However, an organization
does not meet the organizational test if its articles or the law of the State in
which it was created provide that its assets would, upon dissolution, be
distributed to its members or shareholders.
.03 Section 1.501(c)(3)-1(b)(2) states that, for purposes of that section, the term
“articles of organization” or “articles” (collectively, Articles) includes “the trust instrument,
the corporate charter, the articles of association, or any other written instrument by
which an organization is created.”
.04 Accordingly, to be treated as described in § 501(c)(3), an organization must
satisfy the requirements of § 1.501(c)(3)-1(b)(4) by including an adequate dissolution
provision in its Articles or, in the absence of such a provision, by operation of State law.
An organization created in a State the laws of which satisfy the distribution of assets on
dissolution requirements of § 1.501(c)(3)-1(b)(4) does not need to include an express
dissolution provision in its Articles.
.05 Rev. Proc. 82-2 identified the States and circumstances in which an organization
could satisfy the distribution of assets upon dissolution requirements of § 1.501(c)(3)-
1(b)(4) by operation of State law. The conclusions in Rev. Proc. 82-2 were based on

-3-

State laws in effect at the time of its publication. Rev. Proc. 82-2 also provided a
sample of an acceptable dissolution provision for organizations that are required to
include in their Articles an express provision for the distribution of assets upon
dissolution.
.06 Section 7.01(5) of Rev. Proc. 89-14 cautions taxpayers, IRS personnel, and
others concerned to determine whether a revenue procedure on which they seek to rely
has been revoked, modified, declared obsolete, distinguished, clarified, or otherwise
affected by subsequent legislation, treaties, regulations, revenue rulings, revenue
procedures, or court decisions. Section 7.01(6) of Rev. Proc. 89-14 provides that if the
conclusion of a revenue procedure is predicated upon a certain provision or
interpretation of law other than Federal tax law, taxpayers, IRS personnel, and others
generally must determine whether such relevant non-Federal tax law has changed
materially from that used in the revenue procedure on which they seek to rely.
Therefore, under section 7.01(5) and (6) of Rev. Proc. 89-14, a revenue procedure
cannot be relied upon to the extent that it is predicated on State law and that State law
has materially changed.
.07 Many of the State laws considered in Rev. Proc. 82-2 have since been amended,
repealed, or replaced. Rev. Proc. 82-2 therefore no longer provides an accurate list of
the jurisdictions with laws that operate to ensure the distribution of assets for exempt
purposes upon dissolution of an organization for purposes of satisfying § 1.501(c)(3)-
1(b)(4). Accordingly, this revenue procedure is being published to obsolete Rev. Proc.
82-2.
.08 An organization is responsible for verifying whether the requirements of

-4-

§ 1.501(c)(3)-1(b)(4) are satisfied by applicable State law if its Articles do not provide for
the distribution of its assets upon dissolution. An organization can ensure that it
satisfies the requirements of § 1.501(c)(3)-1(b)(4) by including an acceptable dissolution
provision in its Articles. Publication 557, Tax-Exempt Status for Your Organization
(currently available at: https://www.irs.gov/pub/irs-pdf/p557.pdf), provides sample
Articles with a dissolution provision that satisfies the requirements of § 1.501(c)(3)-
1(b)(4). Sample dissolution provisions are also provided in the Instructions for Form
1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal
Revenue Code and the Instructions for Form 1023-EZ, Streamlined Application for
Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.
These sample dissolution provisions are substantively similar to the sample dissolution
provision provided in Rev. Proc. 82-2.
SECTION 3. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 82-2, 1982-1 C.B. 367, is obsoleted as of May 24, 2024.
SECTION 4. DRAFTING INFORMATION

The principal author of this revenue procedure is Christopher Hyde of the Office of
Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment
Taxes). For further information regarding this revenue procedure, contact Mr. Hyde at
(202) 317-5800 (not a toll-free call).