2023 annual revenue procedures updates for exempt organizations

by | Jan 4, 2023

TAX ALERT | January 04, 2023

Annual revenue procedures contain limited updates for exempt organizations

The IRS released the 2023 annual revenue procedures (2023-1 through 2023-5), effective Jan. 3, 2023. Changes specifically affecting exempt organizations are limited.

2023 annual revenue procedures

The 2023 annual revenue procedures (IRB 2023-1), effective Jan. 3, 2023, that affect exempt organization for 2023) are as follows:

  • Rev. Proc. 2023-1 – Letter rulings, information letters, and determination letters
  • Rev. Proc. 2023-2 – Technical advice
  • Rev. Proc. 2023-3 – Areas in which rulings will not be issued (domestic)
  • Rev. Proc. 2023-4 – Determination letters and letter rulings (tax-exempt and government entities, employee plans)
  • Rev. Proc. 2023-5 – Determination letters (exempt organizations)

Highlights include the following:

  • Rev. Proc. 2023-1 retains 2022 user fees (typically, $38,000 for private letter ruling requests; reduced fees of $3,000 and $8,500 for certain “small” organizations).
  • Rev. Proc. 2023-3 does not contain new “no rule” areas specific to exempt organizations. However, section 5.02 states that the IRS will not issue rulings on any issue involving the application of the Inflation Reduction Act of 2022.
  • Rev. Proc. 2023-5 contains three minor changes:
    • Revisions throughout to reflect mandatory e-filing of Form 1024, Application for Recognition of Exemption Under section 501(a) or section 521 of the Internal Revenue Code.
    • A clarification in section 9.02 that an organization may protest/appeal a proposed adverse determination letter on the classification or reclassification of a section 4947(a)(1) non-exempt charitable trust as described in section 509(a)(3).
    • Rev. Proc. 2023-5, section 13.02 has been updated to note that favorable determination letters issued in 2014 and later are available on Tax Exempt Organization Search.
    • Questions or Want to Talk?

      Call us directly at 972.221.2500 (Flower Mound) or 940.591.9300 (Denton),
      or complete the form below and we’ll contact you to discuss your specific situation.

      This article was written by Alexandra O. Mitchell, Morgan Souza and originally appeared on 2023-01-04.
      2022 RSM US LLP. All rights reserved.

      The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

      RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.



      KHA Accountants, PLLC is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

      Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.

      For more information on how KHA Accountants can assist you, please call 972.221.2500.

Are You Prepared for Battle?

Resources are limited, time is short, and enemies are real. To win the war in your market, you need to know yourself. Learn how to redefine your business strategy for today’s competitive landscape through KHA’s Dynamic Business Advising.

Bake’s Takes Volume 1, Issue 3

In this month’s Bake’s Takes, Jonny Baker explores the shift in leadership dynamics and the value of unleashing employee creativity. Baker discusses the need for a daring, contrarian mindset for breakthroughs and the power of asking the right questions. Gain insights from his top three recommended reads to navigate the complexities of change and strategic management.

Where Do I Look?

Ever felt like finding a solution to your business problem is like finding a needle in a haystack? Just as a needle is found by stepping back from the haystack, let KHA Strategic Consultants give you the outside perspective to find your answers. Contact us today for an objective assessment of your business and a proven path to success.

It’s Lonely at the Top

Explore the three key factors contributing to the isolation often felt by CEOs and business leaders. Learn how our Dynamic Business Advisory service can provide the necessary context and expertise to help you navigate complex business decisions.

Bake’s Takes Volume 1, Issue 2

Dive into Bake’s Takes, a monthly roundup of the best leadership reads, curated by Strategic Consulting Partner, Jonny Baker. This edition explores decision-making dynamics, coaching strategies for rookies and veterans, and the journey to authentic leadership. Join us to equip yourself with insights from Jonny Baker, fostering vision, alignment, and execution in your leadership role.

The journey to 2025 tax reform begins

House Ways & Means Committee Chairman Jason Smith (R-MO) and House Tax Subcommittee Chairman Mike Kelly (R-PA) recently announced the formation of 10 “Committee Tax Teams”. Each team will address key tax provisions from the 2017 Tax Cuts and Jobs Act (TCJA) that are set to expire in 2025 and identify legislative solutions.