Form

EFCA Tax Determination Letter

This EFCA federal income tax exemption letter verifies the EFCA's federal 501(c)(3) status.

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This letter recognizes the EFCA’s exemption from federal income tax as a 501(c)(3) organization and verifies the EFCA’s tax ID number. EFCA churches may choose to fall under the EFCA’s exempt status to save both time and financial resources. To find out more about how to come under the EFCA’s tax exempt status, contact adminfin@efca.org or (800) 745-2202.

EFCA’s IRS letter

Note: IRS Advisory Committee on Tax Exempt and Government Entities ("ACT") addresses group exemption rulings.

The IRS Advisory Committee on Tax Exempt and Government Entities ("ACT") issued a report in 2011 that addresses a number of tax compliance issues, including group exemption rulings. The report caught the attention of many church leaders, since thousands of churches have obtained recognition of tax-exempt status by being included in the group exemption ruling of a parent denomination. Unfortunately, the report has caused needless concern, in part because of false claims of a few seminar leaders that the IRS is going to "revoke the group exemptions of churches by the end of the year." The good news is that the IRS is not going to revoke group exemptions. To the contrary, the ACT report recommends that the group exemption procedure be retained. This significant development is explained fully in chapter 12, section A.4, of the 2012 Church & Clergy Tax Guide.

—Church Law & Tax Report, Volume 25 - Number 1, January/February 2012 (ChurchLawAndTax.com)

Recent Issues with Name Changes

An issue has been occurring with name change requests from churches: The IRS has been changing the EFCA organization name to that of our church’s when that church sends in a name change to the IRS.

If your church is included as part of the federal 501(c)(3) group exemption granted to the EFCA, your church will have its own EIN. Whenever corresponding with vendors or any government agency, you should use only your church’s EIN; never use the EIN of the EFCA. The IRS determination letter (often accompanying the Good Standing letter) is for information only. The letter should never be used without the Good Standing letter and/or a cover letter clearly stating the church’s own EIN and explaining the church’s relationship to the EFCA.

An EIN, which stands for Employer Identification Number, is a nine digit number in the form of xx-xxxxxxx. The number is assigned by the federal government. As the name implies, it is a unique number which helps identify a unique organization. An EIN is to a business what a social security number is to an individual. Just as a child has his own SSN and wouldn’t use his mother’s on his taxes, a church under our group exemption has its own EIN and shouldn’t ever use the EFCA's EIN.

In addition, an EIN is not a tax-exempt number. The term “tax exempt number” generally refers to a number assigned by a state or county agency which then identifies an organization as exempt from its sales and use taxes. With respect to the 501(c)(3) group exemption, there is no special tax-exempt number. Using the EIN of the EFCA as a tax exempt number is incorrect. If you have any questions about your church’s EIN and what numbers should and should not be used, please contact adminfin@efca.org.