General supervision, year by year

Before January 22, 2027, every parent organization must make sure each chapter on its group letter is affiliated with it and under its general supervision or control, or remove the chapter (Rev. Proc. 2026-8 s. 12.02(2)(d)). For most groups, general supervision is the route. It is not a feeling of closeness: the revenue procedure defines it as two things you do every year, and you need the record to show it.

The two yearly duties

Under s. 4.02(3), general supervision means that every year you:

1. obtain, review and keep information on each chapter's finances, activities and compliance with its annual filing; and
2. send each chapter written information, or otherwise educate it, about what it must do to keep its exemption, including annual filing.

Both, every year, for every chapter. A chapter you cannot show both for, and do not control by another route, is a chapter the rule says you must remove.

What counts for the first duty

A copy of the chapter's Form 990 or Form 990-EZ covers the financial part. A copy of its Form 990-N e-Postcard does not (s. 4.02(3)(b)): the e-Postcard holds almost no financial information. For chapters that file only the e-Postcard, ask for a short financial summary instead: total revenue, total expenses, and assets and liabilities at year end. For a chapter not required to file any annual return or notice, the information part is optional (s. 4.02(3)(c)), but the yearly letter is not.

Alongside the finances, collect a short description of the year's activities and any change in the chapter's name, address, officers, purposes, activities or governing documents. You have to report changes in a chapter's purpose, character or method of operation on Form 15644, so this is the same information twice over.

What counts for the second duty

A dated letter to each chapter that covers the basics of keeping its exemption is itself the written information the rule asks for, so keep a dated copy of every one you send. Ours covers:

• File every year. Form 990, 990-EZ or the 990-N e-Postcard is due by the 15th day of the 5th month after the chapter's year ends. A chapter that does not file for three years in a row loses its exemption automatically and cannot stay in the group until it is reinstated.
• Stay within its purposes and the 501(c) paragraph your group letter covers.
• Tell the parent about changes, because the parent reports them to the IRS.
• Where to read more: IRS Publication 557, Tax-Exempt Status for Your Organization.

Affiliation, and the control route

Supervision is half of the test; affiliation is the other. The revenue procedure's examples of affiliation are being on your group return, or in a chapter directory you update every year (s. 4.02(2)). The yearly confirmation form a chapter returns is a natural place to record those facts: listed in this year's directory, included in the group return.

Control is the other route (s. 4.02(4)): you appoint a majority of the chapter's directors or officers, a majority of its directors or officers are also yours, or a written agreement gives you control over its activities. If you rely on control, keep the appointment records or the agreement. Whether an agreement gives you control is a question for an attorney.

A record you can show

That tracker, the letters and the returned forms are what a reviewer, your board, or the IRS would ask to see.

Chapters that do not answer

Some will not. Set a return date, follow up once, and record what you did. If a chapter still sends nothing, the rule leaves you a choice your officers make: find another basis, such as control, or remove the chapter after 30 days' notice. Under the transition, that notice has to arrive by about December 23, 2026 at the latest, so send the yearly letter early enough to leave time for silence.

How we fit in

Every first-year package includes the yearly letter, the confirmation form each chapter returns, and the tracker, filled in from what comes back. A licensed reviewer, an enrolled agent or exempt-organization attorney, checks each keep-or-remove call before your officer signs. Our yearly upkeep repeats the cycle and prepares your annual Form 15644.