Tax Issues for National Parent

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Tax Issues for National Parent Club
Treasurers By Edmund R. Sledzik Delegate
American Lhasa Apso Club
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I. Importance of the position 1.
Financial control of the club 2. A
record keeper 3. Disbursement of
Checks 4. Overseer of all events
5. Reports financial health of
Organization, Annual club
invoices/expenses, Special
events that may include more than one
year Budget Person 6. The
responsible person in the club.
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II. Filing IRS tax return Forms 1120 or 990
1. Form 1120, if not exempt the
Club must report no matter how
much you make. Even if a
loss. i. Use Form 1120 if a corporation.
- Pay state taxes. ii. 10 rule for
charities iii. Loss carryovers iv. How many
states? - Wherever you
do business. For Example A
Virginia club holds a
show in Maryland.
Two
state returns must be filed.
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2. Form 990 Except for CA, IN, and NY you
only file one Form. Form 990 i.
Annual reports are different ii. What if
annual report is missed? - No longer a
corporation iii. Some states require that a
copy of the Form 990 be sent to them.
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III. Record Keeping 1. Cash basis or accrual
bases Taxpayer Which one? 2. What
program are you using? 3. Year opens Jan 1
and closes Dec 31 Calendar year
taxpayer 4. Year opens the 1st of any month
and closes on the last day of the month
before the next year. Fiscal year
taxpayer.
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5. Reconciliation outstanding checks
etc. A. Outstanding checks at the end of the
year B. Transfers from one account to
another. i. What I see ii. What the
Treasurer sees C. Depreciation i.
Already taken ii. Not taken iii. Example
ring equipment 7 years
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IV. Tax Returns 1. Form 1120
2. Form 990 - (990 and 990-T
(Schedule (A) for (C) (3) clubs.) 3.
Form 1065 Partnership
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V. Type of Entities for Clubs Recognized
by the IRS 1. Corporation
2. LLC 3.
Association 4. Trust
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VI. Differences Between Types of 501 (C)s
for clubs - 3, 4 and 7 1.
Social clubs (C) (7) Taxes on interest
etc. Form 990-T i. 35
rule ii. 15 rule iii. Unrelated business
income iv. Taxes on interest and
dividends. (1). Set aside rule.
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2. Section 501(C) (3) Clubs A. Schedule A
5 year look at (C) (3) income i.
Disqualified persons. ii. Schedule B donors of
5,000 or more. B. Public charity
versus private foundation i.
Requirement of giving away income by year
end if a foundation. ii. Public charities can
accumulate their income.
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C. Formed usually for prevention of
cruelty to dogs, education, health, and
other Charitable activities. i. No 10
limit. D. State requirements for filing a
copy of the return plus a list of
contributors. E. Other state requirements
such as paying a rescue fee.
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3. Section 501 (C) (4) Clubs Public good
organization A. No 990-T on interest
and dividends B. No schedules as in (3)
C. No 5 year look back to determine
if the club is a public or private
foundation. D. No limit on charitable
contributions.
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VII. Special Rules to consider 1.
When to File? 2. Due dates
3. What happens if you miss filing?
20 a day rule or a percent of
your income. 4. Gross income of
100,000 or more. A required
statement on dues notice.
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5. Unrelated business income items i.
Magazines ii. Adds in catalogues iii.
Catalogue sales iv. Ways and means sales v.
Sales tax (1). On sales (2). On
purchases (3). Depends on state law
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VIII. Audits 1. Clubs
Internal Audits Use of members 2.
IRS - Intent may be to take away your
exemption Records.
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IX. New issues 1. Clubs making less
than 25,000. New rules for 2007.
2. Dissolution of a Club. 3. Forms 1099
and 1096.
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4. Spinning off of rescue, health, education
or other parts of the Club. a. Limited
Liability. b. Insurance c. Control of the
entity. 5. Beware of White Elephants and
similar gifts.
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X. Questions Concerning Taxes and
Exemptions for Your Club
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XI. Conclusion 1. The treasurer is
the key to a successful
operation of a parent club. 2. It is
essential that you keep accurate records.
3. Stay on the cash basis method of operations.
4. Keep permanent records on Quicken etc.
5. File the Form 990 on time or
get an extension. 6. When you leave you
are responsible for the
return of the club for the last year you were
treasurer.
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Edmund R. Sledzik 1704 Shagbark Circle Reston, VA
20190 [phone] Home/Office [phone]
Fax E-mail skyelha_at_aol.com
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