IRS annual revenue procedures for 2025

Internal Revenue Bulletin 2025-1 provides six of the “annual revenue procedures” for 2025.

• Rev. Proc. 2025-1 - Letter rulings, information letters, and determination letters
• Rev. Proc. 2025-2 - Technical advice
• Rev. Proc. 2025-3 - Areas in which rulings will not be issued (domestic area)
• Rev. Proc. 2025-4 - Determination letters and letter rulings (tax-exempt and government entities, employee plans)
• Rev. Proc. 2025-5 - Determination letters (exempt organizations)
• Rev. Proc. 2025-7 - Areas in which rulings will not be issued (international area) 

The changes in this year’s annual revenue procedures that may affect exempt organizations as follows:

• Rev. Proc. 2025-5, section 6.05(2), adds four additional types of organizations that are ineligible to apply for recognition of exemption under section 501(c)(3) using Form 1023-EZ, Streamlined Application for Recognition of Exemption:
  • Organizations previously denied exemption
  • Organizations previously determined to be ineligible to use Form 1023-EZ
  • Organizations conducting activities that involve controlled substances that are prohibited by federal law (regardless of legality under state law)
  • Organizations engaged in exchanging, creating, or distributing digital assets
• In addition, section 6.05(2) of Rev. Proc. 2025-5 provides that automatically revoked private foundations are ineligible to use Form 1023-EZ if they are seeking to convert to public charities. This is a change to prior years’ revenue procedures, which provided that any automatically revoked organization was ineligible to use Form 1023-EZ if they were seeking a change in “foundation classification.”
• Rev. Proc. 2025-5, section 3.01(1), which permits certain section 501(c)(3) organizations to seek reclassification under a different paragraph of section 501(c), includes two clarifications:
  • An organization formerly recognized as described in section 501(c)(3) will continue to be treated as an applicable tax-exempt organization subject to section 4958 for a period of five years after ceasing to be exempt as described in section 501(c)(3) unless it is a private foundation or a governmental unit or affiliate.
  • Private foundations will not be recognized as described in a different paragraph of section 501(c) before terminating its private foundation status under section 507.
• User fees for private letter rulings (PLRs) and technical advice memoranda (TAMs), set forth in Rev. Proc. 2025-1, increase for requests submitted after February 1, 2025:
  • Fees for private letter ruling requests increase from $38,000 to $43,700.
  • Reduced fees for certain “small” organizations increase from $3,000 to $3,450 and from $8,500 to $9,775.
  • Most requests for 9100 relief (i.e., extensions of time to make certain elections) increase from $12,600 to $14,500.
  • Substantially identical requests increase from $3,800 to $4,370.

Ruth Madrigal | ruthmadrigal@kpmg.com

Preston Quesenberry | pquesenberry@kpmg.com