What is an advance ruling period and what are the requirements?
A section 501(c)(3) organization may be classified as a public charity (rather than as a private foundation) on the basis that it is publicly supported. An organization is considered publicly supported if:
It normally receives a substantial part of its support from a governmental unit or from contributions from the general public; or,
It normally receives more than one-third of its support from gifts, grants, contributions, or gross receipts from activities related to its exempt purposes, and not more than one-third of its support from gross investment income.
In addition, the organization must meet the requirements of detailed support tests.
Generally, an organization computes its support over a five-year period. A new organization, however, will be considered to meet the support test if it so states on its application for tax exemption. Each year that the organization files a 990-EZ or 990 return (does not apply to 990-N filers), the level of public support is computed on the return.
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