Qualifying constituents or regions can file as a tax-exempt group under AGD if they meet all of the following criteria:
- The constituent or region’s fiscal year runs from Jan. 1 through Dec. 31.
- The constituent or region is a 501(c)(6) organization.
- The constituent or region has (or has applied) for an Employer Identification Number (EIN).
The AGD group exemption covers a constituent or region under the umbrella of AGD with respect to the constituent/region’s tax-exempt status. However, this exemption does not eliminate the constituent or region’s need to file a Form 990, Form 990-EZ or 990-N with the Internal Revenue Service (IRS).
What is AGD group exemption?
AGD group exemption allows U.S. constituents or regions the opportunity to be included under the umbrella of the AGD Headquarters’ group exemption as a tax-exempt organization. If a constituent or region is under the AGD Headquarters group exemption umbrella, it does not have to be granted tax-exempt status directly from the IRS. If not under the AGD Headquarters’ group exemption, a constituent or region must have tax-exempt status, which is granted through the IRS via a determination letter. If a constituent or region is not under the AGD Headquarters’ umbrella or has not gained tax-exempt status on its own, then it will treated as a for-profit entity and will be required to pay taxes on all gross receipts.
What does tax exempt mean?
Tax exempt means that an organization does not pay corporate federal income tax from activities that are largely related to the purposes for which the organization was granted exempt status. If a constituent or region conducts unrelated activities (such as advertising, for example), then the constituent or region will have to file Form 990T and may have to pay taxes.
Each constituent or region requesting group tax exemption under AGD must be sure to complete the Constituent and Regional Tax Exemption Filing Information (confirmation by phone or email cannot be accepted). Provide a contact name and complete mailing address.
Also, if you would like to participate and file under AGD’s group exemption, and you are required to file Form 990 or Form 990-EZ, AGD requests that upon filing your return, a copy of the constituent’s Form 990 be submitted to AGD Headquarters. If you are required to file Form 990-N, submit a copy of the constituent’s Form 990-N and an Annual Statement of Activity.