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EAA AirVenture 2009 Chapter Leaders Conference

EAA AirVenture 2009 Chapter Leaders Conference. Tax-Exempt Chapters Some Notes on Advanced Topics Patti Arthur, J.D., LL.M (Tax) The Law Offices of Patricia J. Arthur. Advanced Tax-Exempt Topics. 1. Annual Filing Requirements-990 Series 2. Donations to Chapters

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EAA AirVenture 2009 Chapter Leaders Conference

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  1. EAA AirVenture 2009Chapter Leaders Conference Tax-Exempt Chapters Some Notes on Advanced Topics Patti Arthur, J.D., LL.M (Tax) The Law Offices of Patricia J. Arthur Cpoyright 2009 Patricia J. Arthur

  2. Advanced Tax-Exempt Topics 1. Annual Filing Requirements-990 Series 2. Donations to Chapters 3. Unrelated Business Income Tax 4. Recordkeeping and Corporate Governance 5. State Issues and Traps Cpoyright 2009 Patricia J. Arthur

  3. Annual Filing Requirements-990's 990-Very Large TE's only. Gross receipts in excess of $500,000 or assets of $1,250,000 for 2010. In 2011 and beyond-Gross receipts in excess of $200,000 or assets of $500,000. 990EZ-Gross receipts of $50,000-199,999 and assets less than $499,000. 2011 and beyond. 990N-All other chapters no matter how small. Filing due dates 15th day of 5th month. (May 15th). Cpoyright 2009 Patricia J. Arthur

  4. 990N e-Postcard Vast majority of chapters will file this unless they elect to file the 990 or 990EZ. Final guidance published last week. MUST file even if you never applied for formal tax-exempt status on IRS Form 1023 or 1024. If you haven't formally applied, call the IRS at 1-877-829-5500, and tell the agent.... Cpoyright 2009 Patricia J. Arthur

  5. 990N e-Postcard You are officer of an organization, and wish to file your 990N, You are a chapter of a large TE who does not have a GROUP EXEMPTION LETTER (GEL), does not want a GEL and has no intention of filing for one. Your FEIN is:_______________ Your Articles of Organization contain 557 language, Your annual gross receipts are under $5000/yr, You consider yourself a (c)(3) [or 4 or 7] Cpoyright 2009 Patricia J. Arthur

  6. 990n e-Postcard The agent will reset the system and You will be able to file electronically in 8 weeks. Cpoyright 2009 Patricia J. Arthur

  7. Donations to Chapters (c)(3) status (formal or assumed), donations are tax deductible by the donor. Dues are deductible only to the extent the member receives no benefit in return. Must provide donor a confirmation letter for donations over $250.00. Form 1098-C. Cpoyright 2009 Patricia J. Arthur

  8. Unrelated Business Income Tax UBIT or UBTI Income from a trade or business regularly carried on that is not substantially related to the organization's tax-exempt purpose. Hangar rent from members has become a hot issue with the IRS. Must prove the members use the hangar and pay rent to further the tax-exempt purpose. Hangar should be open to the public when supervised. Cpoyright 2009 Patricia J. Arthur

  9. Unrelated Business Income Tax If a hangar is financed and the rents pay the mortgage, that is a very specific type of UBTI. Again, must prove the hangar is used for tax-exempt purposes. Rent is specifically excluded from the definition if the hangar is the facility the organization uses. Cpoyright 2009 Patricia J. Arthur

  10. Unrelated Business Income Tax If you have UBTI, complete for 990-T and file with your return. Cpoyright 2009 Patricia J. Arthur

  11. Recordkeeping Excellent recordkeeping is the single most important thing a Chapter can do to earn and keep TE status. Cpoyright 2009 Patricia J. Arthur

  12. How long do we keep records? Generally, 3 years for return examination. Permanently for determination letter, bylaws, etc. 4 years for employment tax records. Cpoyright 2009 Patricia J. Arthur

  13. Corporate Governance This is the new IRS focus on TE's and charities. www.irs.gov In Charities Tab, search IRS Training Materials-Governance. Applying the SOX 404 regulations to TE's. Cpoyright 2009 Patricia J. Arthur

  14. State Issues Make sure you are registered as a non-profit with your respective secretary of state. Possibly a misdemeanor!!! This is a SEPARATE registration apart from the Articles of Incorporation. Determine if you need a gaming license for raffles. Also can be a misdemeanor. Don't forget to apply for a state sales tax exemption! Cpoyright 2009 Patricia J. Arthur

  15. Resources www.irs.gov Charities Tab. IRS Training Materials on Governance. Publications 557, 4221-PC, 1771 on contributions. www.stayexempt.org State departments of revenue websites. Secretary of State websites for guidance on registration and solicitations of donations. Patti Arthur 719-539-7050 Cpoyright 2009 Patricia J. Arthur

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