Annual Electronic Filing Requirement Small Exempt Organizations Form 990-N

Size: px

Start display at page:

Download "Annual Electronic Filing Requirement Small Exempt Organizations Form 990-N"

Annabel Hancock
5 years ago
Views:

1 Annual Electronic Filing Requirement Small Exempt Organizations Form 990-N Utilized For ALL ENTITIES (Councils, Courts, Assembly s, Chapter s, Inter-City s, Inter-Districts, District Conferences, State Conferences) REVISED by Omar E. Jones National Treasurer and Chief Financial Officer

2 THE IMPORTANCE OF SUBORDINATE UNITS TO FILE Due to the Pension Protection Act of 2006, it mandated all tax-exempt organizations, other than churches and churchrelated organizations, must file an annual return with the Internal Revenue Service. The Form 990-N was created for small tax-exempt organizations that had not previously had a filing requirement. The law also required of any taxexempt organization that fails to file for three (3) consecutive years automatically loses it federal tax-exempt status. TAX EXEMPT ENTITIES 1. EXEMPTION REQUIREMENTS Section 501(c)(3) Religious, Educational, Charitable Associations To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and not of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e. it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates. Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organization, are eligible to receive taxdeductible contributions in accordance with Code section EXEMPTION REQUIREMENTS Section 501(c)(8) Fraternal Beneficiary Societies and Associations To be described in the IRC 501(c)(8), it is listed as a fraternal benefit society, or an Order, or association operating under the lodge system (or for the exclusive benefit of the members of a fraternity itself operating under the lodge system), and providing for the payment of life, sick, accident, or other benefits to the members of such society, Order, association or their dependents. 3. DEDUCTIBILITY OF CONTRIBUTIONS FOR CHARITABLE PURPOSES IRC 170(c)(4) provides in the case of a contribution or gift by any individual, the term charitable contribution includes a contribution or gift to or for the use of a domestic fraternal society, Order, or association, operating under a lodge system, but only if such contribution or gift is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. REQUESTING A FEDERAL TAX IDENFICATION NUMBER If you currently have requested a Federal Tax ID number, separate from the PARENT number, please provide the number, in writing, to the Executive Director. EMPLOYER ID NUMBERS (EINs) An employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. (Council, Court, Assembly, Chapter, Inter-City, Inter-Council, District Conference, State Conference)

3 HOW TO FILE YOUR TAXES Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less are required to electronically submit Form 990-N, also known as the e-postcard. Gross Receipts Definition: Gross receipts are the total amounts the organization received from all sources during its annual accounting period, from January 1 to December 31, without subtracting any costs or expenses. If you do not file your e-postcard on time, the IRS will send you a reminder notice. There is no penalty assessment for late filing the e-postcard, but an organization that fails to file required e-postcards for three consecutive years will automatically lose its tax exempt status. The revocation of the organization s tax-exempt status will not take place until the filing due date of the third year. DUE DATE OF THE E-POSTCARD The e-postcard is due every year by the 15 th day of the 5 th month after the close of your tax year. Example: The Knights of Peter Claver, Inc tax year ends on December 31 st of each year, the e-postcard is due May 15 th of the following year from the National Office. If the due date falls on a Saturday, Sunday, or Legal Holiday, the due date is the next business day. YOU CANNOT FILE THE E-POSTCARD UNTIL AFTER YOUR TAX YEAR ENDS. Information You Will Need to File the e-postcard Completing the e-postcard requires the eight items listed below: 1. Employer Identification Number (EIN), also known as a Taxpayer Identification Number (TIN) 2. Tax Year 3. Legal name and mailing address (Council/Court, etc or the legal name as it appears on the Charter) 4. Any other names the organization uses. (Not Applicable) 5. Name and Address of a principal officer (Grand Knight/Grand Lady/Faithful Navigator s/inter-city, Inter-Council President/District or State Conference President) 6. Web site address if the organization has one. ( 7. Confirmation that the organization s annual gross receipts are $50,000 or less. 8. If applicable, a statement that the organization has terminated or is terminated (going out of business)

COMMONLY ASKED QUESTIONS 1. Junior Branch/Junior Court a. My Junior Branch/Junior Court maintains its own Federal Tax ID number. Where am I to file the 990 information?

4 COMMONLY ASKED QUESTIONS 1. Junior Branch/Junior Court a. My Junior Branch/Junior Court maintains its own Federal Tax ID number. Where am I to file the 990 information? ANSWER, for subordinate units that maintain junior accounts, the financial information is to be filed under the Knight s tax identification number for the Junior Branch and under the Ladies tax identification number for the Junior Court. 2. Joint Account(s) a. What if Councils, Courts, Assembly s, Chapter s, Inter-City s, Inter-Districts, District Conferences, State Conferences maintain a joint account? ANSWER, for those entities that maintain joint accounts, the financial information is to be filed under the Knight s tax identification number N NOT FILED for the past one or two years? a. If a 990-N has not been filed, a letter will be mailed indicating the tax-exempt status has been revoked. (See Example A IRS Revocation Letter) 4. Who do I contact if I have any additional concerns? a. If you have any additional questions or concerns, please do not hesitate to contact the Executive Director at or via at executivedirector@kofpc.org

5 January 1, 2013

Federal Tax-Exempt Status 501(c)(3) Organizations

Federal Tax-Exempt Status 501(c)(3) Organizations Most PTAs are classified as tax-exempt 501(c)(3) public charities under the Internal Revenue Code (IRC). One major advantage for organizations that are