Association of Independent Living Groups

IRS Form 990 Filings

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Introduction

Approximately every two years, each Fraternity, Sorority, and Independent Living Group (FSILG) at MIT participates in an award-winning accreditation process consisting of a peer-review by alumni visiting committees. You can read more about the accreditation process at the main page of this site.

An important part of the accreditation process is checking the status of each organization's required IRS Form 990 filing. Failure to file Form 990s has resulted in known instances of fines of as much as $40,000 to a university fraternal organization. Here is one example of a bill for over $9,900 received by an MIT organization for failing to file a single year's Form 990s. We want to prevent any reoccurrence of such fines.

If you are a group administrator already familiar with 990 requirements, please skip the introductory material and scroll down to the Group Return Certification heading.

Background

The Form 990 is a public document, and Treasury Regulations 301.6104(d)-2-5 permit any member of the public to request a copy of the forms for several recent years. Not only are there fines for not filing the forms with the IRS, there are fines for not producing the forms upon request by a member of the public. These fines may be applied to the organization, its officers, and individual members.

Because the MIT AILG wishes to ensure that none of its member FSILGs or the students in them are affected by these fines, organizations are absolutely required to provide their Form 990s, for both their alumni organization and undergraduate group, to the Visiting Committee subject to the same rules as to any member of the public. If an organization is not able to do so, the Visiting Committee is required to register a reservation as part of the finding.

The IRS requires each organization to either have regular office hours or a web location where the general public can easily examine their Form 990s. Even if the organization has not posted them, the Form 990s may already be on the web site of an organization such as The Foundation Center. If the organization's recent Form 990 is available online, either at a site which posts filed Form 990s or at its own web site, we ask organizations to provide the URL when completing their accreditation data form. If the 990 is not available on line, there must be a copy available for inspection by the general public at the organization's location, and the organization must show this copy to the Visiting Committee during the accreditation visit. Almost all organizations are required to file separate Form 990s for the Alumni and the Undergraduate organizations, unless there is truly no financial separation between the two. Local organizations where the Form 990 filing is handled by the central organization must still meet this public inspection requirement locally by providing copies of the group return.

More information about the public disclosure requirements for the Form 990 and other documentation and the substantial penalties for failure to disclose is available at The Foundation Center and in Appendix D of the IRS Form 990 Instructions. The specific requirement for groups is published in 26 CFR 301.6104(d)-1(f)(2). Scroll to the heading "Documents to be provided by local and subordinate organizations" and to the subheading "Annual information returns".

Letters of Determination, Group Rulings, and EINs

In order to be considered exempt from taxation by the IRS, most exempt organizations must apply for a determination by the IRS that the organization, in fact, is organized and operated for certain specific purposes exempted from taxation by the tax code. Fraternal and Social organizations may apply for a 501(c)(7) exemption by filing a Form 1024 and paying a user fee. The more advantageous 501(c)(3) exemption is generally only available to true public charities, which apply by filing a Form 1023 and paying the corresponding user fee. The result of a successful application is a "Letter of Determination" which states the specific portion of the tax code under which an organization has been determined by the IRS to qualify for exempt status. Both the completed Form 1023 or Form 1024 and the Letter of Determination are also public documents which organizations must keep on file and show to the public upon request. The MIT AILG Accreditation program does not currently request these documents unless the entry for the organization's EIN is missing or incorrect in the IRS Exempt Organization Master File.

The process of applying for a Letter of Determination is complex and costly. For this reason, it is possible for a "central organization" to apply first for its own Letter of Determination and then apply for a "Group Exemption Letter". Once the GEL is received, the central organization may provide the IRS with an annual list of its "subordinate organizations", effectively passing on the central organization's exemption to each listed subordinate.

While it is not uncommon for local alumni house corporations to have gone through the process of obtaining a Letter of Determination on their own, the group exemption process is typically used by undergraduate chapters and may also be available to house corporations if permitted by the national office.

The IRS maintains a publicly accessible database of the Employer Identification Numbers (EINs) of every exempt organization, including important information such as the date of each organization's Letter of Determination, whether it has its own own Letter of Determination or is covered by a parent organization's Group Exemption Letter, which section of the IRS Regs the organization falls under, etc. Please see the IRS charitable statistics page for more information. If an organization's EIN is not found in this database, this likely indicates a problem which is important to solve.

Unlike Public Charities (501(c)(3) organizations), which must have a letter of determination (or inclusion in a group), Social Clubs (501(c)(7) organizations) are not always required to go through the determination process or be included in a group ruling to operate as an exempt organization. Nonetheless, obtaining a determination letter or being listed in a group ruling may be beneficial in some cases. For example, banks may require evidence that you are an exempt organization in order to allow you to open an account. In addition, if the IRS has revoked the organization's exempt status for failure to file a Form 990 for three years, the reinstatement process requires submission of a Form 1024 and payment of the user fee, even when the user fee would not have normally been required.

Group Ruling does not always mean Group Filing

When a central organization includes a subordinate organization in its group ruling, it has not necessarily taken on the responsibility for filing the subordinate's annual form 990. Unless the central organization wishes to file a group return combining two or more subordinate organizations, and each subordinate organization authorizes the central organization, in writing, to include data supplied by the subordinate in a group return, the subordinate remains responsible for filing its own separate return.

A local or subordinate organization that does not file its own annual information return must, nonetheless, upon request, make available for public inspection or provide copies of the group returns filed by the central or parent organization. See page 63 of the IRS Form 990 Instructions.

If a central organization is required to file a Form 990, it must do so on a separate return from the group return. It files its own return using its own EIN, and files the group return using the special EIN associated with the Group Exemption Letter. See this link for regulations on group returns, specifically, search for "Group returns" in the document. See also pages 8 and 10 of the IRS Form 990 Instructions. See this link for information about Form 990-N and Group Return Subordinates.

Group Return Certification

If you are the national representative of an organization with a chapter at MIT, you may have been referred here by a member of your local chapter, by the AILG Accreditation Coordinator, or by the chair of the Visiting Committee which is in the process of reviewing your MIT chapter. The referral is typically the result of your MIT chapter indicating during the review process that their annual IRS Form 990 requirement is handled by the National office, but being unable to provide a copy of a group return.

Although our request for the Form 990 is in compliance with IRS public disclosure requirements, it is not our intention to report any failures to the IRS or to invoke any IRS fines or other sanctions. Our accreditation process has the purpose of protecting FSILGs at MIT from possible harm by correcting problems before there are consequences.

If you were referred to this page with a request to provide certification, your chapter has indicated that its National office handles its tax situation. We are asking you to certify that this is the case, and to assist your chapter in complying with the disclosure requirements. You may do this in one (or both) of two ways. You may complete the certification form below, in which case we will accept your answer as definitive, or you may send the required filings to your chapter and have them provide the forms to our accreditation visitors. In any case, we ask that you assist your chapter meet any relevant requirements in the future, so that during the next round of accreditation reviews, the chapter will be able to reach compliance without needing to contact you.

Disclaimer: While the material here is drawn from official IRS publications, we cannot advise you on your specific situation. You may wish to seek professional advice if you are unsure about your taxation and/or filing requirements.

Instructions

Please complete the online form below, as follows:
  1. Click on the "Start" button below.
  2. Enter the name of your organization where indicated.
  3. Enter the EIN of your MIT chapter. If unknown, enter "unknown."
  4. Of the 8 available statements, mark the checkbox for the one which most closely applies to your organization's chapter at MIT.
  5. If one of the first three statements applies, in addition to checking the corresponding box, please provide the two distinct EINs requested.
  6. Click on the signature box and then enter your name and click "Apply".
  7. Enter your email address and your title below your signature.
  8. Click on the "Click to eSign" button.
  9. A confirmation link will automatically be sent to the email address you supplied.
  10. When you receive the confirmation email, you must click on the link to send the form to MIT's Accreditation Coordinator. Nothing will happen with your form until the confirmation link has been clicked. Note: you do not need to have an account with or sign in to EchoSign to complete this process.
  11. If none of the 8 available statements applies, or if you have any questions, please contact the Accreditation Coordinator, John Covert, by phone at 617 324-8259 or email at .

Online Form

Do not forget to confirm your signature by clicking on the link in the confirmation email you will receive a few seconds after submitting this form. Nothing will be sent to the Accreditation Coordinator until you confirm your signature.