501c3 Control Group Question

[Guest Ski Fast]

I am trying to determine whether my employers are part of a control group.

Both organization A and B are 501c3s. We share office space. The 4 directors(officers) work for both organizations. Organization A has a 5 member board and B has an 8 member board. Only 1 person serves on both boards.

If I look at board membership as ownership, they are not a control group. If I look at the day to day operations, they are. How do I determine the issue for the purposes of our Health Insurance tax credit?

[rcline46]

Who has the power to appoint the board members? If the same entity has the power to appoint (a majority) of each board, you fit in nicely.

[Guest Ski Fast]

Who has the power to appoint the board members? If the same entity has the power to appoint (a majority) of each board, you fit in nicely.

Each board elects new members. Board A does not elect or appoint Board B's members.

[masteff]

In IRS Reg 1.414©-5©, "day-to-day operations" appears to only apply to "permissive aggregation", so unless you're trying to go that route, then you can ignore it.

As to the 80%, I think it's a matter of who and how you count "directors or trustees". The reg says in part: "For this purpose, common control exists between an exempt organization and another organization if at least 80 percent of the directors or trustees of one organization are either representatives of, or directly or indirectly controlled by, the other organization. A trustee or director is treated as a representative of another exempt organization if he or she also is a trustee, director, agent, or employee of the other exempt organization." If we count your 4 directors plus your board members, then neither org has over 80% (assuming only the one common board member counts as a "representative" of both orgs).