Recently, our family foundation revised our by-laws. We are wondering what we do with this updated version. Does it need to be notarized? Do we need to send the revised bylaws to the IRS? 

Yes, you need to submit the revised Bylaws, as described on Form 990PF, Part VII-A, Line 3. It does not need to be notarized.

Since the original by-laws were part of our incorporation papers do these need to be updated?

That depends on the changes made in the Bylaws. In general, when changes are made to the Bylaws, it does not affect the Articles of Incorporation. But that is a very general statement and it really does depend on what changes are being made to the Bylaws. For example, changes regarding Board composition generally tend to affect only the Bylaws and do not impact the Articles of Incorporation. But changes regarding purposes and indemnification often affect the Articles of Incorporation also.

Read the full article about bylaws by Andras Kosaras at the National Center for Family Philanthropy.