Group Tax Exemption Program (GTEP)

A benefit available to Qualified CGCI member clubs and districts
CGCI GTEP Chairman:  Sue Bennett  
RAFFLES 2022:  Note the application fee has increased to $30.
Check the updated form in sidebar
 
What is GTEP?
  • It is the opportunity for a member Garden Club or District to obtain Tax-Exempt Status under the CGCI exemption “umbrella”.
  • Please note:  If you already have tax-exempt status from the IRS and California you DO NOT need to apply through CGCI.  Also, you do not need to “renew” each year through the CGCI program.  If you lose your independent exemption you cannot apply for reinstatement through the CGCI program.
Why is this allowed?
  • California Garden Clubs, Inc. is a not-for-profit educational organization under Section 501(c)(3) of the Internal Revenue Code. This section affords CGCI tax-exempt status.
  • CGCI applied for and received a group exemption letter recognizing subordinate clubs and districts of the type described in
    • Section 501 (c)(3) of the Internal Revenue Code on November 15, 2006
    • Revenue and Tax Code Section 23701d of the California Franchise Tax Board on November 9, 2010, retroactive to November 15, 2006.
  • By obtaining these Group Exemptions, CGCI is able to pass along to its subordinates its tax exemption status under both Federal and California codes.
  • Thus, qualifying member clubs and districts are eligible to be considered tax-exempt organizations under the same status as CGCI, as long as they follow the guidelines set by CGCI on the basis of IRS and California FTB requirements.
  • In order to continue in the CGCI Group Tax Exemption Program, the member clubs and districts also need to meet all Federal and California tax forms and filing requirements.  If your GTEP exemption is revoked, you must apply directly to the IRS for reinstatement.

Participation in GTEP is optional, not included with membership.
A district or club must apply to be included in the program. To qualify for inclusion in GTEP, clubs and districts must agree to follow the guide­ lines required by the IRS and the California FTB and successfully complete the application process administered under the supervision of the CGCI GTEP Chairman and the Financial Consultant. Group tax-exemption status is renewable each year thereafter.

 
By being included in the Group Exemption Letter
-subordinates do not have to file an application for exemption
-members of the Group Exemption do not have to pay the federal or state fees to obtain an exemption letter
CGCI fees:  Application – $35; Annual Renewal – $15
-members of the Group Exemption can accept donations that are tax-deductible under the law
-bequests, legacies, devises, transfers, or gifts are deductible for federal estate and gift tax purposes if they meet the applicable provisions of section 2055, 2106 and 2522 of the Code.

To qualify a club or district, which may or may not be incorporated, must:
1. Be affiliated with and carry out the mission of CGCI. If the club is a member of CGCI, this is already true. To have been ratified as a member of CGCI, a club must have one or more objectives in common. This is also true for districts.
2. Be subject to CGCI’s general supervision and control. As a member of CGCI, this is already true. CGCI is an affiliation of clubs governed by representatives of member clubs who vote at an annual Convention to elect the directors of CGCI and to decide issues.
3. Be exempt under the same paragraph of IRS 50l(c)(3) as CGCI. In other words, a club or district must qualify for tax exemption as an educational and charitable organization, having objectives and activities that are the same as those of CGCI. The MAJORITY of activities must be educational. (Flower shows, speakers, tours, etc. are all “educational” activities.) As part of the application process clubs and districts are required to submit a financial report and an activities report which verify the majority of their activities are educational.
4. Have club or district bylaws which include the required and very specific language required by the IRS.
5. Have bylaws that mirror those of CGCI
6. Have an accounting period the same as that of CGCI, July 1-June 30
7. Are in good standing with the IRS and California FTB and have not been revoked for failure to file the required annual informational re­ turns in a timely manner, or any other reason.
California law requires registration with the Attorney General’s Registry of Charitable Trusts. Whether a GTEP member or not, each club or district must separately report to the Registry of Charitable Trusts annually. Contact the GTEP Chairman for complete information.

Annual renewal as a member of GTEP is required each year. Once a club or district has been ratified as a member of the CGCI GTEP, it is necessary that they submit the Annual GTEP Renewal Form and the required support documentation. The annual renewal form must be and submitted along with other required paperwork as noted below by February first of each year. Make checks payable to CGCI and mail to the GTEP Chairman. Note: If post-marked after February first an additional $15 late processing fee is in effect.
To complete the annual renewal process, member clubs and districts must:
A. Have an authorized officer, president, director or treasurer, of the club or district give permission on the appropriate form IN WRITING annually, that states they wish to continue to be included in the GTEP program for the next fiscal year.
B. Provide an activities report for the most recently completed fiscal year showing that the majority of that year’s activities were educational.
C. Provide an annual financial report for the most recently completed fiscal year in the form of a profit and loss statement, which shows actual gross receipts (income) and expenditures (expenses) classified by budget categories or other descriptive classifications.
The form with a detailed description of the requirements is emailed to clubs and districts annually in September or October. The information is also available on the CGCI website.

California law requires registration with the California FTB and the Attorney General’s Registry of Charitable Trusts. Completing the GTEP process allows CGCI to register the district or club with the California FTB. However, each group must separately report to the Registry of Charitable Trusts annually.

 
NEW application
The following required CGCI forms can be saved to your computer and completed electronically
 
Renewal (annually)
Renewal packet, including the renewal form, will be SENT TO YOU by September 15  by the GTEP Chairman
If you do not receive a packet, please contact the GTEP Chairman.  Note:  The following documents will be posted shortly.
Renewal Cover Letter (Club – 2022)
Renewal Cover Letter (District-2022)
Renewal Form (2022-23) 
Optional Form (for your use)
Organization Information Sheet to keep track of important information needed to complete federal and state filing requirements.
GTEP members (effective July 1, 2022, thru June 30, 2023)
Federal and State forms and publications are listed/linked in the right sidebar 
 
To facilitate the process we have prepared a GTEP Handbook (2022 update)
  • It can be downloaded and saved to your computer or printed for handy reference
It contains:
  •  What is GTEP?
  • GTEP Requirements
  • How to apply
  • How to renew
  • IRS requirements
  • California requirements
  • Frequently Asked Questions
  • Important dates to remember
  • Sample Application Form
  • Sample Articles of Affiliation Form
  • IRS required Bylaws language
 
  • Sample Activities Form
  • Sample Financial Statement
  • Charitable Trust Initial Registration
  • Charitable Trust Treasurer’s Report (NEW 2020)
  • Charitable Trust Annual Report
  • Raffle Registration
  • Raffle Annual Report
  • Organization Information Sheet