Knowledge- A Powerful Tool for Success Legal Matters: What Leaders Need To Know About The IRS Form 990

1. Knowledge- A Powerful Tool for Success Legal Matters: What Leaders Need To Know About The IRS Form 990 Presented By: Derrick A. Humphries Legal Counsel , Humphries & Partners, PLLC 1029 Vermont Ave, NW Suite 800 Washington, DC 20005-3516 O 202-347-7000 F 202-347-2424 dhumphries@hplawyers.com www.hplawyers.comJuly 2011

2. Dedicated to Dr. Dorothy I. Height (1912-2010) “I am grateful to have an opportunity to come together and work on something…over which we have control. It seems to me that so much of my life I am working on issues of trying to get others to change, to do things. And, here we have a task that we, nobody else but we, can do for us. We need to do it for ourselves.” ~ Dr. Dorothy I. Height

3. “Shift Your Thinking from Today’s ProblemstoTomorrow’s Successes!”

4. Successful Leaders are Informed

5. A Result of Failure to File:. I.R.S. Ends Exemptions For 275,000 Nonprofits By STEPHANIE STROM Published: June 8, 2011 “The I.R.S. announced on Wednesday that it had revoked the tax exemptions of 275,000 nonprofit organizations after they did not meet legal requirements to file annual tax forms. “

6. IRS Form 990 Return of Org. Exempt from Income Tax • What is the IRS Form 990?“Form 990 is an annual reporting return that certain federally tax exempt organizations must file with the IRS. It provides information as to the filing organization’s mission, programs and finances.” • “Who Must File? • The National Organization • All local chapters • What is the Annual Filing Deadline:“Each filing organization is required to file by the 15thday of the 5th month after its fiscal year ends.” (Generally May 15th) • Annual Filing Required • An organization that fails to file a Form 990 for 3 consecutive years will have its Exempt Organization Status revoked • EO Website: www.irs.gov/eo • IRS Forms/Publications (800) 829-3676 Download and read IRS Form 990 and its instructions

7. IRS Form 990Return of Org. Exempt from Income Tax General Legal Responsibilities for National / Local Leaders • Complete the IRS Form 990 • Circulate the completed Form 990 amongst the Board of Directors before the President signs and submits the IRS Form 990 • File on Time • Make available copies of the completed, signed and filed IRS Form 990 • Store Copy of Report in the established Central location

8. Which Leaders Are Responsible for Annual Filing of the IRS Form 990 • For the National Organization: • The National Board of Directors • The National Officers: President, Treasurer • For the Local Chapters: • The Local Board of Directors • The Local Chapters Officers:President, TreasurerThe success of the organization is dependent upon the mutual understanding and cooperation of all of its leaders.There is no “I” in the word “TEAM”

9. FORM 990-N (e-postcard) For more information visit: http://www.irs.gov/efile and click on “Charities & Non-profits”

10. Identifiers that MUST be Correct • Organization’s legal name • Organization’s EIN (Employer Identification Number) • Also referred to as taxpayer identification • Unique for each entity listed as tax exempt with IRS

11. IRS Form 990 Part VI, Section B. Policies IRS Form 990 Cover Page

12. Some Questions from the IRS Form 990(Part VI) • 8 Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following: • A The governing body? • b Each committee with authority to act on behalf of the governing body? • 10a Does the organization have local chapters, branches, or affiliates? • b If “Yes,” does the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with those of the organization? • 11 Has the organization provided a copy of this Form 990 to all members of its governing body before filing the form? • 11A Describe in Schedule O the process, if any, used by the organization to review this Form 990. • 12a Does the organization have a written conflict of interest policy?

13. Additional Questions from the IRS Form 990 (Part VI) • 13 Does the organization have a written whistleblower policy? • 14 Does the organization have a written document retention and destruction policy? • 18 Section 6104 requires an organization to make its Forms 1023 (or 1024 if applicable), 990, and 990-T (501 ( c) (3) s only) available for public inspection. Indicate how you make these available. Check all that apply: __Own Website __Another Website __Upon Request • 19 Describe in Schedule O whether (and if so, how), the organization makes its governing documents, conflict of interest policy, and financial statements available to the public. • 20 State the name, physical address, and the telephone number of the person who possesses the books and records of the organization:

14. Do You Need Help In Filling out the IRS Form 990?Identify Knowledgeable Professionals (Applicable to all Leadership Levels) • Lawyer • Accountant • Banker

15. 501 ( c )(3) Eligibility Status______________________ Publication 78 - Lists all organizations eligible to receive tax deductible contributions.Go to the following IRS web site:www.irs.gov/app/pub-78

16. If Your Chapter Needs Reinstatement IRS Rev Notice 2011-43“A small organization- that is, one that normally has gross receipts of not more than $50,000 in its most recently completed taxable year- that qualifies for the transitional relief under this notice and applies for reinstatement of tax exempt status by December 31, 2012, will be treated by the Internal Revenue Service (“IRS”) as having established reasonable cause for its filing failures and tax-exempt status will be reinstated retroactive to the date it was automatically revoked.” www.irs.gov/pub/irs-drop/n-11-43.pdf For further assistance, Contact your lawyer: Derrick Humphries Humphries & Partners, PLLC. 202-347-7000 dhumphries@hplawyers.com

17. Establish a Central Location of Records (Applicable to all Leadership Levels) • Keep records in a safe, secure & constant location: • Annual IRS Reports, i.e. Form 990, Form 990-N • Articles of Incorporation/ * Certificate of Incorporation • By-Laws • Employer Identification Number (EIN) • Available at www.irs.gov • Needed to file for Federal Tax Exemption Status • Minutes of Meetings • Financial Statements • Grants & Contracts • *Annual Certificate of Good Standing * Available from your state’s corporation division B. Inform the continuing and new Leadership of the location of the records C. Sarbanes-Oxley Act of 2002: Document Retention and Destruction Policy

18. Articles of Incorporation, Bylaws Minutes of Meetings Agreements, Contracts Warrants Disbursements, Checks Ledgers Training Records Audit Reports Employee Lists Notes, Memorandums Tax Reports (Form 990) Returns Payroll Records Invoices Reports submitted to city/county/state agencies documenting work performed Requests for reimbursement submitted to city/county/state agencies Correspondence with city/county/state agencies Correspondence and invoices with vendors, contractors, and other individuals who preformed work on any grants/ contracts. RECORD TYPES YOU MAY BE ASKED TO PROVIDE:Please provide any and all documents, records in electronic form, or otherwise for the period of January 1, 2006, through the present , including but not limited to the following:

19. Selected Legal References • Robert’s Rules of Order (10th Edition) • 7 Measures of Success: What Remarkable Associations Do That Others Don’t • Sarbanes-Oxley Act of 2002 • Better Business Bureau Wise Giving Alliance: Standards for Charity Accountability • D.C. Code Ann. § 29-301-30; Ohio Revised Code § 1702-30 • Willens v. 2720 Wis. Ave. Coop. Ass’n, 2004 D.C. App. Lexis 67 (D.C. Mar.11, 2004) • Fletcher CYC. Corp. § 837.60 • Edward R. Camacho v. 1440 Rhode Island Avenue Corporation and Arven Plumley, 620 A.2d 242, 247; 1993 D.C. App. Lexis 26 (1996) • T.C. Memo 1989-36, 1989 WL 3808 (U.S.Tax.Ct), 56 T.C.M. (CCH) 1140, T.C.M. (P-H) P 89, 036, 1989 PH TC Memo 89, 036

20. Thank You Very Much!Derrick A. Humphries Any additional questions email dhumphries@hplawyers.com