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Tax Update for Alumni Classes

Tax Update for Alumni Classes. Rachel L. Williamson, CPA Rachel.L.Williamson@Dartmouth.edu Tax@Dartmouth.edu Joined Dartmouth College in June. Tax Update Agenda. Maintaining Tax Exempt Status New in Fiscal 2013 Filing Requirements Filing Tips IRS Notices Financial Best Practices

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Tax Update for Alumni Classes

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  1. Tax Update for Alumni Classes Rachel L. Williamson, CPA Rachel.L.Williamson@Dartmouth.edu Tax@Dartmouth.edu Joined Dartmouth College in June

  2. Tax Update Agenda • Maintaining Tax Exempt Status • New in Fiscal 2013 • Filing Requirements • Filing Tips • IRS Notices • Financial Best Practices • Questions

  3. Maintain Tax Exempt Status • Tax Exempt Status is generally granted through membership in Dartmouth’s group exemption • Timely File Annual Return • Read & respond to any IRS notices promptly • Do not support or oppose political candidates • Provide copy of return if one is requested

  4. New in Fiscal Year 2013 • The IRS is reminding filers not to include Social Security Numbers on Forms 990 or 990-EZ, since these are publicly available documents. • 990-EZ filers no longer list addresses of Officers, Directors, Trustees and Key Employees.

  5. Clarifications to instructions • 990-N (e-postcard) filings are available when the class’ average gross receipts are less than $50,000. “Average gross receipts” are calculated using the current year and two prior years gross receipts. • The State of New Hampshire does not required an annual filing as long as contributions are solicited only from the class members.

  6. Filing Requirements • Annual Federal Tax Filing is required to maintain tax exempt status • Failure to file Form 990-EZ or Form 990 may result in fines of $20 per day past the due date to maximum of 5% of gross receipts. • Failure to file for 3 consecutive years will result in loss of tax exempt status. • Forms are due November 15, 2013. Extension can be filed on Form 8868 for 990 or 990-EZ filing. • It is important to maintain accurate record of revenue and expenses to fulfill your fiduciary duty, document requirements for filing, and provide accurate reporting.

  7. Filing Requirements

  8. Informational Returns • No Tax • 990-N has no penalties for late filing • 990 EZ and 990 are subject to fines and penalties for late filing • Publicly Disclosed • 990-T requirement for unrelated business income of $1,000 or greater

  9. 990-N • Simplified filing available to classes • Requirements • Average 3 year gross receipts $50,000 or less • All receipts, including proceeds from sales of securities • For groups in existence less than 3 years, different rules apply • Maintain a copy of gross receipts calculation

  10. 990-N Details • IRS filing administered by The Urban Institute • Computer based • Link to the filing available on the IRS website • After setting up profile, you will receive a confirmation email • Check spam folder if confirmation not received quickly • If notified of rejection, file Form 990-EZ

  11. 990-N Details • Information Required • Organization’s DBA name (Dartmouth Class of XXXX) • Mailing address (Blunt Hall) • Website (if any) • EIN • Name & address of principal officer • Organization’s Tax Year (June 30, 2013)

  12. 990-EZ • Schedules required in addition to core form • Schedule A (Public Charity Status) • Schedule E (Schools) • Schedule O (Other information) • Schedule B (Contributions) if one or more contributors gave $5,000 or more • Schedule G (Fundraising) if special events revenue exceeded $15,000

  13. 990 • Required schedules are the same as for 990-EZ • Form 990 is complex and unique to each group • If required to file, we recommend consultation with a tax adviser.

  14. IRS Notices • Failure to file • Missing or incomplete information • Missing Schedule A or E • Required boxes not checked • Contact Alumni Office or Controller’s Office (Tax@dartmouth.edu) for assistance if needed.

  15. Financial Best Practices • Annual review of by-laws to make sure the Class is complying with the by-laws, including formal documented meetings • Keep accurate records of all revenues, expenses, and assets • Bank accounts should use the class EIN and have at least 2 officers listed as signors for all accounts • Reconcile all bank accounts, investment accounts, and cash funds at least annually • If the class has a substantial amount of activity in the treasury, it may be advisable to arrange for an audit of the books periodically.

  16. Financial Best Practices • Treasurer’s Report • The Treasurer should give a financial status update at every board meeting and, ideally, provide quarterly reports. • At the end of the fiscal year, a final report should be generated and presented to the Board. • Copies of the final report should be sent to Alumni Relations to maintain historical records. • Merchant Accounts • If you accept credit cards, make sure you have procedures in place that are PCI compliant

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