Group Exemption Letters
A Group Exemption Letter is given by the IRS to a central organization that has subordinates (or chapters) so that the subordinates or chapters do not have to file for their own 501c3 tax-exempt status. We do both the application for group exemption for the central organization as well as prepare the corporate and incorporation documents for the subordinate organizations. The Group Exemption letter can be useful for churches that wish to have “daughter” churches under a head or principal church (denominational model) as well as for organizations with many chapters, such as the Rotary Club or the Boy Scouts. Also good for sports organizations with many clubs throughout the country.
Our Group Exemption Service Includes:
- Group Exemption Letter
- 501c3 for the central organization
- Incorporation for the central organization, and for the subordinates where necessary
- Incorporation and corporate documents for subordinates
Group exemptions are for related organizations that are very similar to each other in their structure, purposes and activities. The central organization generally supervises or controls many chapters, called subordinate organizations. To qualify for a group exemption, the central organization and its subordinates must have a defined relationship. Subordinates must be affiliated with the central organization and subject to its supervision or control.
- A subordinate that is organized and operated in a foreign country may not be included in a group exemption letter.
- Although churches are not required to apply for recognition of their own status in order to be tax-exempt, under the procedures for group rulings, a church must request recognition of its own exempt status in order to be the central organization in a group ruling.
- A subordinate may not be included in a Group Exemption Letter if it is a private foundation. Such an organization should apply separately for recognition of exempt status.
Please call for additional information.