Hi there,
I don't expect a full-blown answer on this, but I'm hoping someone can point me to an IRS publication, revenue procedure, technical advice memo or something I can look through on this.
Here's the story: client is a 501(c)(3) organization involved in the prevention of animal cruelty (no, its not the ASPCA or at all associated with the ASCPA, its a much smaller organization only in one state). They receive contributions from various donors, hold fundraisers, and they file annual reports and returns like they are supposed to, as they have an annual budget of more than $25,000.
They have numerous affiliated "chapters" around the state. Every one of these chapters are unincorporated associations with very small budgets of their own, mostly paid out of members' own pockets. These chapters solicit money on behalf of the 501(c)(3) organization and hold fundraisers of their own with nearly all the proceeds going to the 501(c)(3)... only time there might be some money received or raised by these chapters that doesn't go to the 501(c)(3) organization is when expenses of a fundraiser need to be covered but ALL profits go to the (i.e., to pay for the cost of raw food at a barbeque when the prepared food is being sold to the general public but any profits from the barbeque go to the 501(c)(3) organization).
What I need to know is... what kind of disclosure, if any, does the
501(c)(3) organization need to make to the IRS about this? Is any kind of group exemption number necessary that covers both them and the unincorporated chapters (they of course have their own exemption number now but it is just for them) ?Anyone who could point me to the regulation, statute, IRS publication or published advice that clarifies this, that would be wonderful.
Thanks in advance.