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Legal
Counsel > For Congregations >
Tax Exemptions > Group Exemptions
The
Internal Revenue Service (IRS) has the Group Ruling exemption
procedure by which a parent organization (in this case ELCA) can
establish for its subordinate organizations tax exempt status for
federal income tax purposes.
Even
though a subordinate organization is listed in the ELCA Yearbook,
they also must have been included in one of the filings to IRS made
by ELCA annually. In order to be included in the ELCA’s group
ruling, a subordinate organization must meet and substantiate the
following criteria:
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Must authorized its inclusion in
writing by completing; ( Form
No. 1  for congregations;
Form No. 2
for other subordinate organizations )
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Must
have a nine-digit Federal Employer Identification number (EIN);
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Must
not have received an individual letter of determination from the
IRS, as a consequence of having filed an application on IRS Form
1023;
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Must
be "controlled or supervised" by the ELCA; and
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Must, in its governing documents, contain appropriate clauses that
establish its character as a public charity. These clauses
include prohibition against any of the assets income inuring to
the benefit of private persons, and provision that upon
dissolution of the organization its assets will go to another
organization qualifying as tax exempt under 501(c)(3) of the
Internal Revenue Code.
The
advantage of compliance with this group exemption procedure is that
a subordinate organization can then obtain a certification letter
from the ELCA General Counsel indicating that the subordinate
organization has been included in ELCA's group exemption filing.
This letter is comparable in effect to a determination letter issued
to organizations that file application for exempt status on IRS Form
1023.
The
certification letter issued by the ELCA General Counsel confirms
that a subordinate organization has been included in the ELCA Group
Exemption filing. This letter could be requested and used in any of
the following situations:
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Application for a bulk mailing permit issued by a U.S. Post
Office;
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Application for state sales tax exemption; (Exemption from
state and local sales and other taxes does not automatically
follow because one has exempt status from federal income tax
purposes; however, in many states proving exempt status from
federal income tax is a prerequisite for applying for exemption
from sales and other local taxes.);
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Application seeking a grant or matching funds from another
501(c)(3) organization (e.g., a fraternal life insurance company).
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Settlement of an estate or receipt of a gift where money has been
left to a subordinate organization; or
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On
occasion, the donor to a subordinate organization will request
proof of the donee's organization tax exempt status. Subordinate
organizations are included in the ELCA's annual filings with IRS
under one of these specific categories:
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Churchwide Organizations
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Synods
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Other National Organizations
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Other Synod Related Organizations
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Seminaries
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Colleges and Schools
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Social Ministry Organizations
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Camps and Conference Centers
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Campus Ministry Organizations
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Continuing Education Centers
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Coalitions
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Congregations, Multi-point Ministries, and Other Ministries Under Development
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Synodical Women's Organizations
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Synodically Authorized Worshiping Communities/Chapels
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Supporting Organizations
How to Contact Us Regarding a
Certification Letter?*
To initiate the Group Ruling Exemption
process for your congregation or other ELCA entity,
please send us an e-mail to 501c3@elca.org
Enter the subject line, Tax Exempt Status, and send it. You will
receive an automatic reply which states:
Please provide us with your entity
name, address, city, state, and the Federal Employer
Identification Number (EIN) currently used for filing wage
statements or quarterly reports with the IRS.
Once we have verified that this information is
in the group ruling, we will send the certification letter and
attachments by PDF to your e-mail location. If there is any
discrepancy with the information currently in the group ruling, we
will e-mail you directly. Thank you.
When you have e-mailed your
information back to us, we will verify that the information in
our ruling is accurate, or not. If our information agrees,
we will forward your certification letter with its attachments
electronically. If our information does not agree, we will
e-mail you requesting further documentation.
*Please
note that new inclusions for social ministry organizations,
congregations under development, synodically authorized
worshipping communities, and campus ministries need to contact
their applicable units at the churchwide organization to start
the process.
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