My 501(c)(3) organization should have been classified as a public charity under section 509(a)(1) since most of our funds are derived from diverse general public donations. Unfortunately, I must have marked something incorrectly and have been classified as a private foundation. What recourse do we have to correct this now before we move into our second year? We have not actually started operations yet and are still organizing logistics, partnerships, and processes.
The IRS has a form for pretty much everything and the form you want in this situation is Form 8940. It is a form for “miscellaneous determinations,” including termination of private foundation status. Most of the situations involving termination of private foundations involve those that have been operating for a while and want to change their status or go out of business, but the instructions say it can also be used for a private foundation that was “erroneously determined” to be a private foundation and wants to “correct the error.” Check it out. At least the IRS will know how to process your request.