501 c 3 status. Can 2 charities share 1 determination letter, & file taxes seperately?

Question

I checked on a organization in CA, they have a 501 c 3 status, but they told me they share their 501 c 3 with an organization in NV, but NV isn't listed anywhere. Is this legal? Do they file tax returns jointly or seperately? I wanted to donate to them, but something doesn't seem right.

Answer 1

It is not uncommon for small charities to "share" 501c3 status with only one determination letter. When that is the case the "parent" organization would be required to file tax returns for all of the "shared" activities. It is legal if done correctly. That said it is also an easy to "cheat" and difficult to verify that the donation given to one of the sibling organizations is deductible. Normally they give you the Tax ID for the parent organization.

Answer 2

I would say that an organization that is in multiple states would only need one determination letter, like Goodwill or the Salvation Army. It would be very expensive for an organization in multiple states to need a separate letter for each area.

Answer 3

If it's two separate organizations, rather than just a branch in a different state, I'd think they'd each need their own 501(c)3 letter.

Answer 4

We are accounting firm and the best help we can tell you as all situations are different is to say use the search features and review for your issues at Revenue's Regs at http://www.irs.gov

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