[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.503(c)-1]

[Page 54-55]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.503(c)-1  Future status of organizations denied exemption.

    (a) Any organization described in section 501(c) (3), (17), or (18), 
or an employees' trust described in section 401(a), which is denied 
exemption under section 501(a) by reason of the provisions of section 
503(a), may file, in any taxable year following the taxable year in 
which notice of denial was issued, a claim for exemption. In the case of 
organizations described in section 501(c) (3), (17), or (18), the 
appropriate exemption application shall be used for this purpose, and 
shall be filed with the district director. In the case of an enmployees' 
trust described in section 401(a), the information described in Sec. 
1.404(a)-2 shall be submitted with a letter claiming exemption. All 
employees' trust described in section 401(a) shall submit this 
information to the district director with whom a request for a 
determination as to its qualification under section 401 and exemption 
under section 501 may be submitted under paragraph (s) of Sec. 601.201 
of this chapter (Statement of Procedural Rules). A claim for exemption 
must contain or have attached to it, in addition to the information 
generally required of such an organization claiming exemption as an 
organization described in section 501(c) (17), or (18), or section 
401(a) (or section 501(c)(3) prior to January 1, 1970), a written 
declaration made under the penalities of perjury by principal officer of 
such organization authorized to make such declaration that the 
organization will not knowingly again engage in a prohibited 
transaction, (as defined in section 503(b) (or 4975(c) if such section 
applies to such organization)). In the case of section 501(c)(3) 
organizations which have lost their exemption after December 31, 1969, 
pursuant to section 503, a claim for exemption must contain or have 
attached to it a written agreement made under penalities of perjury by a 
principal officer of such organization authorized to make such agreement 
that the organization will not violate the provisions of chapter 42. In 
addition, such organization must comply with the rules for governing 
instruments as prescribed in Sec. 1.508-3. See Sec. 1.501(a)-1 for 
proof of exemption requirements in general.
    (b) If the Commissioner is satisfied that such organization will not 
knowingly again engage in a prohibited transaction (as defined under 
section 503(b) or 4975(c), as applicable to such organization) or in the 
case of a section 501(c)(3) organization, will not violate

[[Page 55]]

the provisions of chapter 42, and the organization also satisfied all 
the other requirements under section 501(c) (3), (17), or (18), or 
section 401(a), the organization will be so notified in writing. In such 
case the organization will be exempt (subject to the provisions of 
section 501(c)(3), or sections 501(c) (17), (18) or 401(a), and 503, and 
504 when applicable) with respect to the taxable years subsequent to the 
taxable year in which the claim described in section 503(c) is filed. 
Section 503 contemplates that an organization denied exemption because 
of the terms of such section will be subject to taxation for at least 
one full taxable year. For the purpose of this section, the term taxable 
year means the established annual accounting period of the organization; 
or, if the organization has no such established annual accounting 
period, the taxable year of the organization means the calendar year.
    (c) For taxable years beginning after December 31, 1969, the denial 
of an exemption pursuant to this section, for a taxable year prior to 
January 1, 1970, of an organization described in section 501(c)(3) shall 
not cause such organization to cease to be described in section 
501(c)(3) for purposes of part II of subchapter F, chapter 1 and for 
purposes of the application of chapter 42 taxes.
    (d) In the case of an organization described in section 501(c)(3), 
which has lost its exemption pursuant to section 503, and which has not 
notified the Commissioner that it is applying for recognition of its 
exempt status under section 508(a) and this section, no gift or 
contribution made after December 31, 1969, which would otherwise be 
deductible under section 170, 642(c), or 545(b)(2) shall be allowed as a 
deduction. For rules relating to the denial of deductions with respect 
to gifts or contributions made before January 1, 1970, see, Sec. 
1.503(e)-4.

[T.D. 7428, 41 FR 34622, Aug. 16, 1976, as amended by T.D. 7896, 48 FR 
23817, May 27, 1983]