Subordinate organizations

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A subordinate organization is one that is under control of the central organization.

According to the United States IRS Publication 557 (Rev. July 2001), Tax-Exempt Status for Your Organization - Chapter 1 Page 6, this is the definition for a subordinate organization:

A subordinate organization is a chapter, local, post or unit of a central organization. A central organization may be a subordinate itself, such as a state organization that has subordinate units and is itself affiliated with a national (central) organization.

A subordinate organization may or may not be incorporated, but it must have an organizing document. A subordinate that is organized and operated by a foreign country may not be included in a Group Exemption Letter (GEL). A subordinate described in section 501(c)(3) may not be included in a group exemption letter if it is a private foundation described in section 509(c).

If your organization is a subordinate one controlled by a central organization (for example, a church, the Boy Scouts, or a fraternal organization), you should check with the central organization to see if it has been issued a GEL that covers your organization. If it has, you do not have to file a separate application unless your organization no longer wants to be included in the group exemption letter.

If your group exemption letter does not cover your organization, ask your central organization about being included in the next annual group ruling update that is submits to the IRS.