What This Letter Means
Letter 5048 is a favorable determination letter. The IRS approved an organization formed outside the United States, or in a U.S. territory, as tax exempt under section 501(c)(3) and classified it as a public charity.
A foreign organization has to meet the same organizational and operational tests as a domestic charity to get this approval. Related letters cover other outcomes: Letter 5049 approves a foreign organization as a private foundation, and Letter 5050 covers foreign organizations exempt under a different subsection.
What to Do
No response is needed. Keep the letter with the organization's permanent records. Banks, grantmakers, and donors may ask for it.
Your Filing Requirements
The letter lists the annual returns the organization must file. The IRS sets Form 990 series and Form 990-T requirements for foreign organizations much like it does for domestic ones. If the organization has employees, employment tax filing requirements may apply too.
Foreign organizations are generally subject to automatic revocation if they fail to file required annual returns for three consecutive years, the same as domestic organizations. Calendar the due dates.
About Donor Deductions
Exemption and deductibility are different questions. Contributions to foreign organizations generally are not deductible by U.S. donors unless a tax treaty provides for it, as the U.S. treaty with Canada does. Contributions to organizations formed in a U.S. possession are deductible. Don't tell donors their gifts are deductible without checking which rule applies.
If your organization received Letter 5048 and has questions about its U.S. filing obligations, call us at (813) 229-7100.