GCFA previously published an FAQ sheet to explain what the Group Tax Exemption Ruling is and how your ministry can apply to be included. If your organization establishes or documents its exempt status by inclusion as a “subordinate organization” in the UMC Group Tax Exemption Ruling, it is likely that your organization does not appear on the IRS Tax Exempt Organization Select Check database (“Select Check”).
Only organizations that apply directly to the IRS for exemption appear on Select Check, so as a group ruling subordinate, your organization will not appear on this list. Luckily, per IRS Publication 4573, group ruling subordinate organizations are not required to be listed on a database if the parent organization (in this case, GCFA) is listed. Thus, a subordinate organization’s failure to show up in Select Check does not mean the subordinate organization isn’t tax-exempt. However, we have found that over the past couple of years many businesses and grant-giving groups have turned to an electronic verification process as a means of verifying an organization’s exempt status, such as searching the Select Check database for your organization’s EIN. If they do not have an existing understanding of the IRS requirements for group exemptions and their subordinates, they may deny your grant request when their search comes up empty.
Possible solutions…
Your organization’s Group Ruling Packet meets the IRS’s requirements for proof of your tax-exempt status. Your Packet includes 1) a Certificate of Inclusion letter that includes your organizations legal name, EIN, and address, 2) a 1974 Letter from the IRS that verifies the creation of the group ruling, and 3) IRS Publication 4573 that provides general information about group exemptions rulings and explains how a grantor/donor can verify the tax-exempt status of a group ruling subordinate. Providing this collection of documents with a grant application is essential. This collection of documents can be requested any time at UMgroupruling.org.
Having a profile on GuideStar will be helpful with proving your exempt status. GuideStar is an online directory of US charities and nonprofit organizations. GCFA has partnered with GuideStar so that our UM Group Ruling website provides an option for us to send your organization’s information for GuideStar to create a profile. Your organization’s listing on GuideStar can help verify your organization’s 501(c)(3) status with entities like Amazon Smile, the Walmart Foundation, and Network for Good. Don’t forget to Claim Your Profile!
We cannot stress this enough: locating, or obtaining, your organization’s EIN issuance letter from the IRS is essential. This is the letter that an organization receives when an EIN is issued by the IRS. Because the IRS is the entity that administers and maintains EINs, GCFA is unable to verify that a particular EIN belongs to your organization. The only way to officially verify the EIN that is issued to your organization is by having this letter from the IRS. If you cannot locate your organization’s original EIN issuance letter, you can call the IRS EIN Division directly at 1-800-829-4933 and ask them to send you a copy of your organization’s EIN letter (147C Letter). Tip: It is good practice to have this document on file permanently. If you do not currently have your organization’s EIN letter, be proactive and request it before you are in need!
If you have exhausted all efforts to prove your organization’s 501(c)(3) status as a group ruling subordinate organization, or someone requests verification of your organization’s inclusion from the parent organization, please have someone reach out to the GCFA Legal Department at legal@gcfa.org.