IRS Form 8940 Guide: Request Miscellaneous Determination

Introduction – What Is Form 8940?

IRS Form 8940, titled Request for Miscellaneous Determination, is a formal application administered by the Internal Revenue Service (IRS) Exempt Organizations (EO) division. It is used by existing tax-exempt organizations and private foundations to request specialized post-exemption rulings and determination letters.

While an organization uses Form 1023 or Form 1024 to obtain its initial tax-exempt recognition, its mission, operations, or legal classification often change over time. Form 8940 provides the official channel to request binding administrative approvals from the IRS for structural changes that cannot be handled on regular annual tax returns.

Purpose of the Form – Why Does Form 8940 Exist?

Nonprofit governance is tightly regulated under federal tax law. Actions such as changing a charity classification, issuing scholarships from a private foundation, or terminating private foundation status carry significant tax consequences and risk severe excise penalties if done without government authorization.

Form 8940 solves this issue by establishing a single, streamlined process for exempt organizations to seek formal IRS approval before executing major organizational actions. Receiving an official determination letter gives donors, board members, and grantmakers legal certainty that the organization’s tax status remains valid and compliant.

Who Needs to File This Form?

Your organization needs to file Form 8940 if it is an existing exempt entity seeking one of several specific determinations permitted under annual IRS revenue procedures. Common qualifying requests include:

• Advance Approval of Grant-Making Procedures: Private foundations requesting advance approval to award scholarships, fellowships, or achievement prizes to individuals under Section 4945(g).
• Reclassification of Foundation Status: An organization seeking to change from a private foundation to a public charity, or changing its public charity classification (such as moving between Section 509(a)(1), 509(a)(2), or 509(a)(3) supporting organization status).
• Approval of Unusual Grants: Public charities seeking approval to exclude large, unexpected donations from public support test calculations so the contribution does not undermine their public charity status.
• Exemption from Form 990 Filing: Organizations requesting formal relief from the requirement to file an annual Form 990 or Form 990-EZ under Section 6033.
• Private Foundation Terminations: Private foundations initiating a 60-month termination period under Section 507(b)(1)(B) to operate as a public charity.
• Advance Approval of Voter Registration Activities: Private foundations seeking approval for nonpartisan voter registration drives under Section 4945(f).
• Canadian Registered Charities: Canadian charities requesting recognition of 501(c)(3) or public charity status under the United States–Canada Income Tax Treaty.

Who Is Exempt / Not Required to File?

Most everyday administrative updates and general charity operations do not require Form 8940. You are exempt or not eligible to file this form if:

• Applying for Initial Tax Exemption: Newly formed organizations seeking 501(c)(3) or 501(c)(4) tax-exempt status must file Form 1023, Form 1023-EZ, Form 1024, or Form 1024-A, not Form 8940.
• Public Charities Awarding Scholarships: The Section 4945 advance approval rules apply strictly to private foundations. A public charity (such as a community foundation, church, or university) can award educational grants and scholarships without filing Form 8940.
• Routine Operational Updates: Simple changes to an organization’s mailing address, fiscal year, or primary officers are reported on your annual Form 990 or Form 8822-B.
• Passing Support Tests Naturally: Public charities that meet normal 33⅓ percent public support benchmarks without needing “unusual grant” safe-harbor treatment.

When to File Form 8940

Form 8940 is an event-based application, not an annual recurring return. You submit it only when your organization requires an official determination or advance approval.

Timing is critical because several determination types require advance approval before any money is spent or programs launch:

• Scholarship Programs: Private foundations must submit Form 8940 and secure written IRS approval prior to awarding or paying scholarship funds to individuals.
• 60-Month Terminations: Foundations terminating their status must submit notification before the beginning of the 60-month transition period.
• Unusual Grants: Requests should generally be submitted before or during the tax year in which the large grant is received.

Where and How to File

The IRS requires electronic filing for Form 8940 through the federal Pay.gov portal. Paper submissions by mail are no longer accepted for standard determinations.

To submit the form, access Pay.gov, complete the digital version of Form 8940, upload your supporting narrative exhibits as a combined PDF file, and pay the mandatory IRS user fee electronically using a credit card or bank debit. If an IRS determination agent specifically requests paper documentation during review, mail the records directly to the IRS address as per instructions provided by that agent.

Step-by-Step Instructions to Fill Form 8940

Form 8940 requires basic organizational information followed by detailed, request-specific exhibits. Follow this general workflow when preparing your filing.

Organization Identification

Enter the legal name of the organization, Employer Identification Number (EIN), primary mailing address, and contact details. If a CPA or attorney is handling the submission, ensure a signed Form 2848 (Power of Attorney) is attached.

Selection and Schedule Breakdown

Section	Form Focus	Key Filing Directions
Part I	Type of Request	Check exactly one box corresponding to the determination you are seeking (e.g., Section 4945(g) grant approval, foundation reclassification, or unusual grant approval).
Part II	Organizational History	State the Internal Revenue Code section under which your organization is currently recognized, the date of your original exemption letter, and whether prior rulings have been issued.
Part III	Specific Information Schedules	Complete the specific line items and narrative questions tied to your request type. For scholarships, outline selection criteria; for reclassifications, provide public support math.
Signatures & Fee	Certification and Payment	An authorized officer or trustee must sign the electronic declaration under penalties of perjury, and the user fee must be remitted via Pay.gov.

Required Documents and Information Needed Before Filling

Depending on the type of determination requested, gather the following records prior to beginning your online submission:

• Original IRS Exemption Letter: A copy of your original 501(c) determination letter.
• Detailed Program Narratives: For scholarship approvals, complete written documentation detailing grant eligibility, selection committee procedures, and objective evaluation criteria.
• Five-Year Financial Support Schedules: For public charity reclassifications, financial spreadsheets showing revenue breakdown (public gifts versus investment income) across the last five tax years.
• Governing Documents: Current Articles of Incorporation, Bylaws, and any formal amendments approved by your board.
• Form 2848: Power of Attorney and Declaration of Representative if an external accountant or attorney is submitting on your behalf.

Common Mistakes to Avoid

A single omission can lead to months of administrative delays or outright rejection. Watch out for these frequent mistakes:

• Paying Scholarships Before Approval: Private foundations that disburse scholarship funds while Form 8940 is still pending violate federal law and trigger immediate excise taxes.
• Selecting Multiple Determination Types: Attempting to bundle several unrelated determinations on one form. In most cases, each distinct determination requires a separate Form 8940 and user fee.
• Using Form 8940 for Initial Exemption: Filing Form 8940 to request new tax-exempt status instead of filing Form 1023 or Form 1024.
• Vague Scholarship Criteria: Submitting scholarship guidelines that give board members subjective discretion rather than using an independent committee and objective, merit-based or need-based criteria.
• Forgetting the User Fee: Failing to authorize the required user fee payment on Pay.gov will prevent your submission from being processed.

Penalties for Non-Filing or Errors

Form 8940 does not carry a direct late-filing fine because it is an elective petition. However, operating without required approvals carries severe excise taxes and regulatory sanctions under Chapter 42 of the Internal Revenue Code:

• Section 4945 Taxable Expenditure Penalties: If a private foundation awards scholarships without advance approval, the IRS assesses an immediate 20 percent excise tax on the foundation for the total dollar amount disbursed.
• Foundation Manager Liability: Foundation officers and managers who knowingly approve unapproved individual grants face a personal 5 percent excise tax, up to $10,000 per grant.
• Second-Tier Penalties: If the foundation fails to correct the taxable expenditure after notification, a massive 100 percent excise tax is imposed on the foundation, and managers face an additional 50 percent penalty.
• Revocation of Charity Status: Improperly altering operations or relying on misclassified public support can result in the retroactive revocation of public charity status.

Related Forms and Schedules

Form 8940 coordinates with several key exempt organization tax forms:

• Form 1023 / Form 1023-EZ: Application for Recognition of Exemption Under Section 501(c)(3).
• Form 1024 / Form 1024-A: Application for Recognition of Exemption Under Section 501(a).
• Form 990 / Form 990-EZ / Form 990-PF: Annual Information Returns for tax-exempt organizations and private foundations.
• Form 4720: Return of Certain Excise Taxes Under Chapters 41 and 42 (used to report and pay excise taxes if grants were paid improperly).
• Form 2848: Power of Attorney and Declaration of Representative.
• Form 8822-B: Change of Address or Responsible Party – Business.

Frequently Asked Questions

Can Form 8940 be used to apply for initial 501(c)(3) status?

No. Initial applications for tax-exempt status must be filed using Form 1023 or Form 1023-EZ. Form 8940 is exclusively for organizations that are already recognized as tax-exempt.

Does a public charity need Form 8940 to give scholarships to students?

No. Public charities can administer scholarship and fellowship programs under their general charitable mandate without advance IRS approval. Advance approval rules under Section 4945(g) apply only to private foundations.

How much is the IRS user fee for Form 8940?

IRS user fees for miscellaneous determinations are updated annually in Revenue Procedure 5. Filers should consult the current Exempt Organizations user fee schedule on the IRS website or Pay.gov before submitting.

How long does the IRS take to process Form 8940?

Processing times typically range from 90 to 180 days depending on the complexity of the request and IRS staffing levels. Plan well in advance of launching new grant or scholarship programs.

Can a private foundation award scholarships while Form 8940 is pending?

No. You must receive the signed, official IRS determination letter approving your grant procedures before issuing any payments to individuals. Paying grants beforehand triggers taxable expenditure excise penalties.

What is an “unusual grant” on Form 8940?

An unusual grant is a substantial, unexpected donation from a disinterested party attracted by the organization’s publicly supported nature. Approval allows a public charity to exclude the large sum from public support calculations so it does not inadvertently lose its public charity classification.

Conclusion – Key Takeaways Summarized

IRS Form 8940 is an indispensable legal tool for tax-exempt organizations and private foundations navigating structural transitions or launching individual grant programs. It bridges complex tax regulations with everyday nonprofit operations, giving organizations binding protection against excise taxes.

To ensure a smooth determination process, submit your application electronically through Pay.gov, provide comprehensive narrative attachments and objective criteria, remit the correct user fee, and wait for official written approval before disbursing funds.