The Federal Government and Your Grange

There are various Federal Agencies that your Grange may have to have contact with. Then include;

1. Internal Revenue Service - IRS:
2. Environmental Protection Agency - EPA:
3. Fish and Wildlife Service - FWS:

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Internal Revenue Service - IRS:

As a Grange we may be called upon to deal with many different governmental agencies. The Internal Revenue Service is one that we deal with every year.

1. Types of Non-Profit Exemptions:
2. Required Filings:
3. Group Exemptions:

Types of Non-Profit Exemptions:

Granges typically are exempt non-profits under any of the following Internal Revenue Code (IRC).

To be exempt under Internal Revenue Code (IRC) section 501(c)(8), a fraternal beneficiary society, order, or association must meet the following requirements:

1. It must have a fraternal purpose. An organization has a fraternal purpose if membership is based on a common tie or the pursuit of a common object. The organization must also have a substantial program of fraternal activities.
   
2. It must operate under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system. Operating under the lodge system requires, at a minimum, two active entities: (i) a parent organization; and (ii) a subordinate (called a lodge, branch, or the like) chartered by the parent and largely self-governing.
   
3. It must provide for the payment of life, sick, accident, or other benefits to the members of such society, order, or association or their dependents.
   
4. An organization that provides benefits to some, but not all, of its members may qualify for exemption so long as most of the members are eligible for benefits, and criteria for excluding certain members are reasonable.

To be exempt under IRC 501(c)(10), a domestic fraternal society, order, or association must meet the following requirements:

1. It must have a fraternal purpose. An organization has a fraternal purpose if membership is based on a common tie or the pursuit of a common object.  The organization must also have a substantial program of fraternal activities.
   
2. It must operate under the lodge system. Operating under the lodge system requires, at a minimum, two active entities: (i) a parent organization; and (ii) a subordinate organization (called a lodge, branch, or the like) chartered by the parent and largely self-governing.
   
3. It must not provide for the payment of life, sick, accident, or other benefits to its members. The organization may arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status.
   
4. It must devote its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes.
   
5. It must be a domestic organization, that is, it must be organized in the United States.

To be exempt under IRC 501(c)(5), a Agricultural/Horticultural Organization must meet the following requirements:

1. The activities of agricultural and horticultural organizations involve raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits.
2. For this purpose, aquatic resources include only animal or vegetable life, but not mineral resources. The term harvesting, in this case, includes fishing and related pursuits.
3. The primary purpose of exempt agricultural and horticultural organizations under Internal Revenue Code section 501(c)(5) must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. Their net earnings may not inure to the benefit of any member.

 

Required Filings:

Although they are exempt from income taxation, exempt organizations are generally required to file annual returns of their income and expenses with the Internal Revenue Service. If an organization has unrelated business income, it must file an unrelated business income tax return. In addition to filing an annual exempt organization return, exempt organizations may be required to file other returns and pay employment taxes.

Here are some links regarding required filings:

• Form 990 Resources and Tools for Exempt Organizations:
• Environmental Protection Agency - EPA:
• Fish and Wildlife Service - USFWS:

 

Group Exemptions:

The IRS sometimes recognizes a group of organizations as tax-exempt if they are affiliated with a central organization. This avoids the need for each of the organizations to apply for exemption individually. A group exemption letter has the same effect as an individual exemption letter except that it applies to more than one organization.

Each subordinate must authorize the central organization to include it in the application for the group exemption letter. (Click here for sample letter) The authorization must be signed by a duly authorized officer of the subordinate and retained by the central organization while the group exemption letter is in effect.

In the case of a new organization described in section 501(c) of the Code that wants to be included in a group exemption, it must submit its authorization before the end of the fifteenth month after it was formed in order to satisfy the requirement of section 508(a).
The central organization must also include this subordinate in its next annual submission.

To qualify for a group exemption, the central organization and its subordinates must have a defined relationship. Subordinates must be (1) Affiliated with the central organization; Subject to the central organization’s general supervision or control; and (2) Exempt under the same paragraph of IRC 501(c), though not necessarily the paragraph under which the central organization is exempt.

The central organization must submit an annual update to the IRS.  This update is file at least 90 days prior to the close of the fiscal year. 
Being list on the Group Exemption does not change the filing requirement for your Grange.  You must still file your annual return with the IRS.

If your Grange does not already have its own independent determination letter it may request inclusion on our Group list. All Granges on the new list will become a 501(C) when our Group application is approved.

REQUIREMENTS FOR INCLUSION IN A GROUP EXEMPTION LETTER

A central organization applying for a group exemption letter must obtain recognition of its own exempt status.
It must also establish that the subordinates to be included in the group exemption letter are:

• Affiliated with it;
• Subject to its general supervision or control;
• All exempt under the same paragraph of section 501(c) of the Code, though not necessarily the paragraph under which the central organization is exempt;
• Not private foundations, if the application for a group exemption letter involves section 501(c)(3);
• All on the same accounting period as the central organization if they are to be included in group returns; and

Organizations that have been formed within the 15-month period prior to the date of submission of the group exemption application, if they are claiming section 501(c) status and are subject to the requirements of section 508(a), and wish to be recognized as exempt from their dates of creation. A group exemption letter may be issued covering subordinates, one or more of which have not been organized within the 15-month period prior to the date of submission, if all subordinates are willing to be recognized as exempt only from the date of application.

INFORMATION REQUIRED ANNUALLY TO MAINTAIN A GROUP EXEMPTION LETTER

In order to maintain a group exemption letter, the central organization must submit annually, at least 90 days before the close of its annual accounting period, to the Internal Revenue Service Center indicated in .02 of this section, the following information:

• Information regarding all changes in the purposes, character, or method of operation of subordinates included in the group exemption letter.
• Lists of (a) subordinates that have changed their names or addresses during the year, (b) subordinates no longer to be included in the group exemption letter because they have ceased to exist, disaffiliated, or withdrawn their authorization to the central organization, and (c) subordinates to be added to the group exemption letter because they are newly organized or affiliated or they have newly authorized the central organization to include them. A separate list must be submitted for each of the three categories set out above. Each list must show the names, mailing address (including Postal ZIP Codes), actual address if different, and employer identification numbers of the affected subordinates. An annotated directory of subordinates will not be accepted for this purpose. If there were none of the above changes, the central organization must submit a statement to that effect.
• The information required by section 5.031 a through h, with respect to subordinates to be added to the group exemption letter. However, if the information upon which the group exemption letter was based is applicable in all material respects to such subordinates, a statement to this effect may be submitted in lieu of the information required by items (a) through (d) of section 5.031.

For more information about group exemption requirements and procedures, see Publication 4573, Group Exemptions.

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environmental protection Agency - EPA:

Normally, as a Grange you would not deal with the EPA unless there is an endangered or listed species on your property. Keep in mind that endangered and threatened species are rare, and the probability of one being on your property is very low. But if one is on our property then Section 9 of the Endangered Species Act (ESA) does not require the private landowner to actively manage for a listed species as is required on federal lands. However, management activities must not adversely affect critical habitat.

 

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United States Fish and Wildlife Service - USFWS:

The USFWS is the federal agency responsible for implementing the ESA. So, again, unless you have a endangered or threaten species, you should not have to worry about the USFWS.