Eaa airventure 2009 chapter leaders conference
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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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Eaa airventure 2009 chapter leaders conference

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


Advanced tax exempt topics

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


Annual filing requirements 990 s

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


990n e postcard

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


990n e postcard1

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


990n e postcard2

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


Donations to chapters

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


Unrelated business income tax

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


Unrelated business income tax1

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


Unrelated business income tax2

Unrelated Business Income Tax

If you have UBTI, complete for 990-T and file with your return.

Cpoyright 2009 Patricia J. Arthur


Recordkeeping

Recordkeeping

Excellent recordkeeping is the single most important thing a Chapter can do to earn and keep TE status.

Cpoyright 2009 Patricia J. Arthur


How long do we keep records

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


Corporate governance

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


State issues

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


Resources

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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