Tax Exempt Status for U.S. Chapters

Participating in ICG's Group Exemption Letter (GEL)

The ICG provides a way for its U.S. chapters to be recognized as 501(c)(3) non-profit organizations. ICG's Group Exemption Letter (GEL) is issued by the U.S. Internal Revenue Service, and enables chapters to share in the ICG's tax-exempt status.

By participating, chapters do not have to file a separate application for exemption and can accept donations that are tax-deductible under the law. Participating chapters also do not have to pay fees to obtain an exemption letter, or wait the normal four year period. This benefit is available without charge to any U.S. ICG chapter that chooses to participate.

Here are some frequently asked questions about participating in the ICG GEL.

Why should my chapter participate in the ICG GEL?

Chapters enjoy a number of advantages by participating in the ICG GEL:

• Chapters are recognized as exempt from federal income tax under section 501(c)(3) of the Code
• Donors may deduct contributions to chapters as provided by section 170 of the Code
• Bequests, legacies, devises, transfers, or gifts to chapters are deductible for federal estate and gift tax purposes
• Chapters are exempt from the requirement to file IRS Form 990-N, "Exempt Organization Business Tax Return"
• Chapters can use their federal tax exempt status to file for state tax exemption status.

How does my chapter start the process?

Chapters who wish to be included in the ICG GEL Letter should submit the following items to the GEL administrator at gel-admin@costume.org (PDF format preferred).

1. A letter stating that the chapter:
   • is affiliated with the ICG;
   • accepts the ICG Uniform Governing Instrument (UGI);
   • is eligible to qualify for exemption under the same 501(c) paragraph as the ICG;
   • is not a foundation;
   • has a fiscal year that ends on December 31st;
   • is willing to be exempt from the date of application.
2. A detailed description of the purposes and activities of the chapter, including the sources of receipts and the nature of expenditures.
3. A sample copy of a uniform governing instrument, (such as a chapter's articles of incorporation or articles of association) adopted by the chapter.Chapters are not reqired to be incorporated.
4. An affirmation that, to the best of the officer's knowledge, the purposes and activities of the chapter are as stated in (2) and (3) above.
5. The federal EIN number for the chapter.
6. The Chapter's financial reports for the prior year, as indicated above:
   • Balance Sheet.
   • Income and Expenses Report.

The annual deadline for a submission to be included in the ICG GEL is July 31.

What is required to maintain a chapter's status under the ICG GEL?

Once a chapter has been included in the ICG's GEL, there is a small amount of book keeping required each year. The chapter must prepare an annual GEL report and send it to the ICG GEL administrator at gel-administrator@costume.org (PDF format preferred) by July 31.

The chapter GEL report includes:

• Balance Sheet for the fiscal year (Assets = Liabilities + Equity)
• Income/Expense Report, for the fiscal year (gross receipts by category and all expenses by category)
• Statement describing primary sources of income and the nature of expenditures
• A list of the chapter's current officers with their mailing addresses
• A receipt for the chapter's Form 990-N for the last year

The GEL administrator asks chapters to file Form 990-N with the U.S. Internal Revenue Service each year. This is a short e-postcard that can be filled out and transmitted on-line to the IRS free of charge. Chapters should include the filing receipt they receive by email with their annual GEL report.

Tax exempt organizations are required to make the last three years of financial reports and tax filing public. To comply with this requirement, the GEL administrator will post the last three years of each participating chapter's reports on the ICG website. There is no need for a chapter to maintain a website to participate.

What is the role of the ICG GEL Administrator?

The ICG GEL Administrator facilitates compliance with U.S. tax code regulations. At least 90 days before the end of the ICG's fiscal year (that would be the end of September), the ICG GEL Administrator files an update with the IRS that includes:

• A statement describing changes during the year in the purposes, character, or method of operation of the chapters;
• A list of names, mailing addresses, actual addresses if different, and Employer Identification Numbers (EINs) for chapters that, since ICG's previous report:
  • Changed names or address;
  • Were deleted from or added to the roster
• For chapters being added, the GEL Administrator attaches
  • A statement that the information on which the present GEL is based applies to the new chapters
  • A statement that each chapter has given the ICG written authorization to add its name to the roster
  • A list of those chapters to which the IRS previously issued exemption rulings or determination letters
  • A statement that none of the chapters is a private foundation as defined in section 509(a) of the Code
  • The street address of each chapter whose mailing address is a P.O. Box;
• If applicable, a statement that the group exemption roster did not change since the previous report.

The annual submission to the IRS must be completed by September 30.

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This page last updated December 1, 2012
Copyright-2012 by the International Costumers' Guild