Merger under state law may result in a new entity or in one of the
parties to the merger ceasing its existence. In either case, the IRS
must determine whether the post-merger entity continues to be organized
and operated for section 501(c)(3) purposes.
Accordingly, you should notify the IRS, by letter to
EO
Customer Account Services, of the merger, and submit copies of any
amendments to your articles of organization or by-laws as part of the
merger transaction. You may also wish to consider whether the merger
will result in other adverse tax consequences, such as recognition of
gains on assets transferred.
See an
article on the effect of Internal Revenue Code section 337 and
Treasury Regulation section 1.337(d)-4 on exempt organizations.
Most tax-exempt organizations that end their operations, either through
shutting down, transferring their assets or merging with another
tax-exempt organization, must inform the IRS about the details of the
action. To understand how this is accomplished we suggest you read:
New Fact Sheet on
Termination or Merger of Exempt Organizations
