On October 15, 2012, the IRS began examinations of more than 2,000 tax-exempt organizations serving as parent organizations for group ruling purposes. The purpose of the examination is to determine whether these organizations are exercising proper oversight over the members of their group. Many religious and non-religious organizations, such as the American Cancer Society and the NAACP (National Association for the Advancement of Colored People), have group rulings by which one organization serves as the central organization through which subordinate organizations can obtain tax-exempt status without having to apply separately to the IRS.

The issue of whether parent organizations are exercising proper oversight came to light as a result of the change in law which requires revocation of tax exemption for organizations that fail to file IRS Forms 990  for three consecutive years. Each member of a group ruling generally must file its own IRS Form 990. However, the IRS noticed that many organizations that are a part of a group ruling did not file returns and, therefore, had their status revoked. This raised a concern as to whether proper oversight was being exercised by parent organizations having group rulings. This turn of events should put parent organizations on notice that they need to check with members of their group to make sure they are filing their IRS Forms 990 and are generally aware of their compliance obligations.