How to Read Your IRS Determination Letter: A Field Guide for Nonprofits

Estimated reading time: 24 minute(s)

When the IRS approves your tax-exempt status, it sends you a determination letter. Most founders read the first line, feel a wave of relief, and file it away in a drawer. That’s a mistake. Your determination letter is one of the most important documents your organization owns, and nearly every field on it tells you something you’ll need for filing, fundraising, and staying compliant.

What Is a Determination Letter?

A determination letter is the official notice from the IRS confirming that your organization qualifies for tax exemption. For most charities, it’s issued as Letter 947 (this used to be Letter 1045) and confirms exemption under Internal Revenue Code Section 501(c)(3). Organizations recognized under other subsections, such as 501(c)(4) or 501(c)(6), receive their own determination letters, and the fields on them work much the same way. It’s the document donors, grantmakers, and state agencies ask for when they want proof that you’re a legitimate exempt organization.

Keep it somewhere safe and easy to find. You’ll reach for it more often than you’d expect.

How to read your determination letter 

This is a field guide. We’ll walk through the letter top to bottom so you know exactly what each part means and why it matters. Here’s a quick reference to the fields you’ll find on it.

Field on the Letter	What It Means	Why It Matters
Date	The date the IRS issued the letter	Not the same as when your exemption began
Employer ID number (EIN)	Your federal tax ID	Used on every return you file
Public charity status	Your foundation classification under section 509(a), such as 509(a)(2)	Shown in the letter header. It tells public charities which support test to track over time. Your 501(c) exemption itself appears in the body of the letter.
Form 990 / 990-EZ / 990-N required	Whether you must file annually	“Yes” means a missed return puts your status at risk
Effective date of exemption	The date your exemption legally began	For 501(c)(3) organizations, contributions on or after this date can be deductible
Contribution deductibility	Whether donor gifts are deductible	The line donors and grantmakers ask for
Addendum applies	Whether an attachment is part of the letter	If “Yes,” the addendum is legally binding
DLN	The IRS document locator number	Handy if you ever call the IRS about your file

How to Read the Header Fields

The top-right block of the letter is dense with information. Here’s what each line is telling you.

Date

This is the date the IRS issued the letter, not the date your exemption started. Those are two different things, which we’ll get to below.

Employer ID number (EIN)

Your organization’s federal tax ID. You’ll use this on every return you file, so confirm it matches your records exactly.

Person to contact

A name, ID number, and phone number for IRS customer service. If you ever need to ask about your status, start here.

Accounting period ending 

This is your fiscal year-end, often December 31. It determines when your annual return is due, so it directly drives your filing deadline. If you want to change your fiscal year later, that’s a separate accounting-period/tax-year change process—not an accounting-method change.

What Your Classification Tells You

Public charity status appears in the letter header and shows the IRS classification you fall under, such as 509(a)(2), not your 501(c)(3) status itself. Your underlying 501(c) exemption is stated in the body of the letter. For publicly supported charities, this 509(a) classification also tells you which support test you’ll need to monitor over time.

• Section 501(c)(3) is the best-known exemption, but it isn’t the only one. 
• Social welfare organizations and civic leagues generally fall under § 501(c)(4)
• Business leagues and trade associations under § 501(c)(6), and 
• Social and recreational clubs under § 501(c)(7)

The biggest practical difference is often donor deductibility: contributions to a § 501(c)(3) organization are generally deductible as charitable contributions under § 170, subject to donor-level limits and substantiation rules, while contributions to most other § 501(c) organizations generally are not deductible as charitable contributions. 

Some payments to non-§ 501(c)(3) organizations may still be deductible as business expenses, and limited exceptions apply. 

Public Charity or Private Foundation

Every 501(c)(3) is classified as either a public charity or a private foundation. If your organization isn’t broadly publicly supported, the IRS treats it as a private foundation, which is typically funded by a single family, individual, or company. Private foundations follow stricter rules, including an excise tax on net investment income and annual payout requirements, and they file Form 990-PF every year no matter their size.

A private operating foundation is a private foundation that spends most of its resources running its own charitable programs, such as a museum, library, or research facility, rather than making grants to other groups. It still files Form 990-PF, but meeting the operating tests can qualify it for some of the more favorable treatment that public charities receive.

Form 990 / 990-EZ / 990-N required. 

If this says “Yes,” the IRS expects an annual return from you. Which version you file depends on your gross receipts and total assets, and public charities that normally take in $50,000 or less can file the Form 990-N e-Postcard. 

Form 990-EZ generally can be filed by public charities with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of the tax year; larger organizations generally file Form 990. Your return is generally due the 15th day of the 5th month after your accounting period ends, so May 15 for calendar-year filers. These gross receipts and asset thresholds apply only to public charities. 

Private foundations file Form 990-PF every year regardless of size, and the 990-N and 990-EZ options aren’t available to them.

That single rule is why we tell every nonprofit to treat the annual return as non-negotiable. If you’ve fallen behind or filed the wrong version, our post on how to amend a 990 form can help you correct the record.

What Happens If You Don’t File Form 990?The IRS is required to send a notice after two consecutive missed filings, but that notice does not stop the clock. If the organization misses the third consecutive required return or notice, exempt status is automatically revoked. This means you’d have to apply for reinstatement and potentially pay taxes for the gap.

What the Effective Date Tells You

Effective date of exemption. This is the date your tax-exempt status actually began, and it’s often earlier than the date at the top of the letter. Contributions made on or after this date generally can qualify as deductible charitable contributions, subject to § 170 limitations, substantiation, and other donor-level requirements. If you started raising money before your approval came through, this date tells you which gifts fall inside the exempt period.

Contribution deductibility. When this says ‘Yes,’ the organization is eligible to receive tax-deductible charitable contributions, but each donor’s deduction remains subject to § 170 limits and substantiation rules. This is the line you’ll point donors and grantmakers to when they ask whether their support is deductible.

The Fields Founders Overlook

A few remaining fields are easy to skip but worth knowing.

Addendum applies. 

• If ‘Yes,’ the addendum is part of the determination letter and should be read together with it. Read it. 
• If it says “No,” the letter stands on its own.

DLN (Document Locator Number). This is the IRS’s internal tracking number for your file. You generally won’t need it day to day, but it’s handy if you ever call the IRS about your determination.

Body language. The letter also explains that 501(c)(3) organizations are classified as either public charities or private foundations, and confirms which one you are. It’s boilerplate, but it’s the plain-English summary of everything the header fields spell out.

What to Do With Your Letter Now

Once you understand your letter, put it to work.

1. Store a digital copy where your board and finance team can reach it.
2. Share it with banks, grant portals, major donors that request proof of status. Also consider uploading it to your website. 
3. Lock in your 990 deadline using the accounting period and filing requirement fields, so you never drift toward automatic revocation.

If you lost your original letter, you can download determination letters issued in 2014 or later through the IRS Tax Exempt Organization Search tool, or request an older one using Form 4506-B. You can review the official guidance on the IRS charities and nonprofits pages.

Your determination letter sets the terms of your compliance life, and the annual return is how you keep it. Tax990 supports Form 990-N, 990-EZ, 990, 990-PF, and more, with built-in checks that help you file the right form for your status the first time.

Start Filing Your Form 990 for Free

Want to spend less on filing while you’re at it? Review our Form 990 preparation checklist!