Tax Exempt Status of 4H Clubs and Affiliates

1
Tax Exempt Status of 4-H Clubs and Affiliates

• Ryan J. Schmiesing, Ph.D.
• Associate State 4-H Leader

2
Session Objectives

• Review historical context of the tax exempt
  status of 4-H
• Review the current tax exempt status of 4-H
• Provide process for 4-H clubs and groups and
• Share resources to implement in county 4-H
  programs.

3
Why Now?

• Our office fields a variety of questions
  throughout the year on this topic.
• Many of you have faced challenges in providing
  the appropriate documentation that a club is tax
  exempt.
• Federally, there have been many questions,
  concerns, comments, opinions, etc.

4
Step One

• Dont Panic!

5
(No Transcript)
6
Step Two

• Obtain a Federal Tax Identification Number or EIN
  if not already completed
• To obtain an EIN, complete the SS-4 form use
  the sample provided
• EIN may be obtained on-line from the IRS at
  http//www.irs.gov/businesses/
• On right hand column, click on Employer ID
  Numbers
• If using above, EIN will be provided on-line

7
(No Transcript)
8
(No Transcript)
9
(No Transcript)
10
(No Transcript)
11
Step Three

• From each 4-H club or affiliate that you are
  responsible for
• Request their EIN so that you may request
  inclusion under the group exemption
• Use the sample letter provided, if you would
  like
• Those that do not want to share their EIN, will
  not be included under the GEN.

12
Step Four

• County Extension Professional must
• Submit a written request with the IRS.
• Use the sample letter provided.
• Local or state Extension official (Educator,
  Program Assistant, County Director, etc.) must
  sign the letter (not a volunteer)!
• Send to the address provided.

13
Step Five

• The IRS will respond to the request for inclusion
  under GEN 2704
• Computer generated letter to the organization
  that submitted the request.
• You may call the IRS at their Customer Service
  Number (1-877-829-5500)
• Note there is no guarantee that calling the IRS
  customer service number that you will learn the
  status of the request.

14
Important Numbers

• IRS Customer Service1-877-829-5500
• Group Exemption Number (GEN)
• 2704

15
Common Questions
16

• What is the benefit of completing the paperwork
  (submitting the letter to the IRS) for clubs?
• Donors may deduct contributions such as bequests,
  legacies, devises, transfers, or gifts as
  applicable under the IRS code.
• 4-H Club will be able to provide documentation
  that it is a 501 (c)3 entity.

17

• Are there benefits for my club as it relates to
  purchasing materials in Ohio?
• This process helps ensure that the individual
  club may claim tax exemption when making a
  purchase locally.

18

• My club wants to make a purchase at a local
  store, what do they need to do to ensure they do
  not pay taxes?
• The club shall complete a blanket certificate of
  exemption when making a purchase. If it is
  necessary to provide a vendor number, please use
  the club EIN.
• 4-H Clubs and affiliates are not to use the OSU
  Extension Office EIN!

19

• Is my 4-H committee or club required to make a
  report to the IRS?
• 4-H organizations have an obligation to file the
  Annual Information Return, Form 990 when gross
  receipts in their tax year normally exceed
  25,000.00.

20

• Is the EIN the same thing as a TIN?
• Yes. Taxpayer Identification Number (TIN) or
  Employer Identification Number (EIN) is a
  nine-digit number that the IRS assigns to
  organizations. The IRS uses the number to
  identify taxpayers who are required to file
  various business tax returns. TIN/EIN are used by
  employers, sole proprietors, corporations,
  partnerships, nonprofit associations, trusts,
  estates of decedents, government agencies,
  certain individuals, and other business entities.

21

• On the letter to the IRS for inclusion in the
  2704 Group Exemption, can I use the office
  address instead of a 4-H advisor address?
• Yes. This would be logical recognizing that
  there is sometimes considerable turnover in 4-H
  advisors/treasurers.

22
Handouts

• National 4-H Headquarters Fact Sheet Tax
  Exemption Status of 4-H Clubs Affiliated
  Organizations
• Sample Letter to 4-H Clubs
• Sample Letter to IRS (must be on letterhead and
  signed by Extension official)

23
Acknowledgements

• Thanks to the Extension professionals attending
  the 2007 State 4-H In-Service for providing
  feedback on the original presentation.
  Additional thanks to Lisa McCutcheon (Licking
  County) and Jim Jordan (Butler County) for
  reviewing and providing specific suggestions.