CGCI Group Tax Exemption Program
A Benefit Available to Qualified CGCI Member Clubs and Districts....
IRS 501(c)(3) and California 23701d Tax-Exempt Status for Your Garden Club or District
Under the CGCI Group Tax Exemption Program
The applications made by California Garden Clubs Inc. (CGCI) for group exemption letters recognizing qualified subordinate clubs and districts as organizations of the type described in section 501(c)(3) of the Internal Revenue Code were approved by the Internal Revenue Service on November 15, 2006 and by the State of California Franchise Tax Board on November 9, 2010, retroactive to November 15, 2006. California Garden Clubs Inc. is thereby authorized by the Internal Revenue Service and the California Franchise Tax Board to include subordinate clubs and districts, who have met all requirements set forth by the Internal Revenue Service under section 501(c)(3) of the code, in the California Garden Clubs Inc. Group Tax Exemption Program.
Donations made to clubs and districts which are included in the CGCI Group Tax Exemption Program may be deducted by donors as charitable contributions on their income tax returns. (Bequests, legacies, devises, transfers, or gifts are deductible for federal estate and gift tax purposes if they meet the applicable provisions of section 2055, 2106 and 2522 of the Code.)
What your club needs to be included in the CGCI Group Tax Exemption Program
According to the IRS, to qualify, your club must:
- have complied with the IRS requirement to file an annual information return or electronic notice [the e-postcard Form 990-N] for tax years beginning in 2007 and subsequently. The Pension Protection Act of 2006 mandated annual reporting by non-profit organizations. The IRS has begun to revoke the tax-exempt status of organizations that failed to file for three consecutive years.
- be federated as a member club and carry on the mission of CGCI.
If your club is a member of CGCI, this is already true. To have been ratified as a member of CGCI, your club must have one or more objectives in common. All member clubs of CGCI must also be a member of the district.
- be subject to, and participate in, CGCI’s general supervision and control.
As a member of CGCI, this is already true. CGCI is an affiliation of clubs which is governed by the representatives of member clubs who vote at an annual convention each year to elect the directors of CGCI and to decide issues.
- be exempt under the same paragraph of IRC 501(c)(3) as CGCI
In other words, your club must qualify for tax exemption as an educational and charitable organization, having objectives and activities that are the same as those of CGCI. The MAJORITY of activities must be educational. (Flower shows, speakers, tours and the like are all “educational” activities.)
- have club bylaws, which include the required IRS language
To see an explanation of the language required by the IRS at Click here
- have articles of association/affiliation mirror with CGCI.
This is a form your club needs to read, discuss and agree to.
- use the same accounting period as CGCI.
(July 1– June 30)
- maintain a detailed description of the purposes and activities of your club, including the sources of receipts and the nature of expenditures.
This description of activities shows that the majority of your club or district activities are educational.
- renew this information with CGCI by FEBRUARY 1 of each year.
- have an authorized officer of your club give permission on the appropriate form to CGCI IN WRITING, each year by February 1, that states your club wants to be included in the CGCI Group Tax Exemption Program for the next fiscal year.
CGCI Districts are eligible to apply for membership in the CGCI Group Tax Exemption Program if they comply with the above procedures.
For instructions and the form needed to apply, click here.
For Important Info for Nonprofits, click here.
Updated May 17, 2013