In addition to administrative remedies, an organization may use certain judicial remedies. If the statutory prerequisites are met, an organization may file suit in a United States District Court or the United States Claims Court for a refund of taxes paid, or in the United States Tax Court for a re-determination of any tax deficiencies. An exempt organization may also file suit for a declaratory judgment in certain situations. Any of these suits may result in a decision that an organization was exempt for the period considered by the court.
If the final judicial determination is that an organization is exempt from tax, is not a private foundation, or is a private operating foundation, the Service will issue a favorable ruling or determination letter, under the following procedures, providing the underlying facts and applicable law are the same as in the period considered by the court.
An organization that had previously filed an application for recognition of exemption and has been determined to be exempt by the court does not need to submit a new application. The organization should submit a brief statement that its activities are the same as those in the period considered by the court. The statement must be signed by a principal officer. If the applicable law has not changed, the Service will issue a favorable ruling upon receipt of this statement.
An organization that had not previously filed an application for recognition of exemption but has been determined to be exempt by the court will be issued a ruling or determination letter only when it makes application in the appropriate manner. The application should contain a statement that the organization’s activities are the same as those in the period considered by the court.
- Publication 892, Exempt Organization Appeal Procedures for Unagreed Issues
- Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund
DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.