Tax Update for Alumni Classes

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Tax Update for Alumni Classes

• Rachel L. Williamson, CPA
• Rachel.L.Williamson_at_Dartmouth.edu
• Tax_at_Dartmouth.edu
• Joined Dartmouth College in June

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Tax Update Agenda

• Maintaining Tax Exempt Status
• New in Fiscal 2013
• Filing Requirements
• Filing Tips
• IRS Notices
• Financial Best Practices
• Questions

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Maintain Tax Exempt Status

• Tax Exempt Status is generally granted through
  membership in Dartmouths group exemption
• Timely File Annual Return
• Read respond to any IRS notices promptly
• Do not support or oppose political candidates
• Provide copy of return if one is requested

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New in Fiscal Year 2013

• The IRS is reminding filers not to include Social
  Security Numbers on Forms 990 or 990-EZ, since
  these are publicly available documents.
• 990-EZ filers no longer list addresses of
  Officers, Directors, Trustees and Key Employees.

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Clarifications to instructions

• 990-N (e-postcard) filings are available when the
  class average gross receipts are less than
  50,000. Average gross receipts are calculated
  using the current year and two prior years gross
  receipts.
• The State of New Hampshire does not required an
  annual filing as long as contributions are
  solicited only from the class members.

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Filing Requirements

• Annual Federal Tax Filing is required to maintain
  tax exempt status
• Failure to file Form 990-EZ or Form 990 may
  result in fines of 20 per day past the due date
  to maximum of 5 of gross receipts.
• Failure to file for 3 consecutive years will
  result in loss of tax exempt status.
• Forms are due November 15, 2013. Extension can be
  filed on Form 8868 for 990 or 990-EZ filing.
• It is important to maintain accurate record of
  revenue and expenses to fulfill your fiduciary
  duty, document requirements for filing, and
  provide accurate reporting.

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Filing Requirements
Gross Receipts and Assets IRS Form
Average gross receipts under 50,000. 990-N
Gross receipts less than 200,000 and total assets less than 500,000. 990-EZ
Gross receipts 200,000 or greater. 990
Total assets 500,000 or greater 990
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Informational Returns

• No Tax
• 990-N has no penalties for late filing
• 990 EZ and 990 are subject to fines and penalties
  for late filing
• Publicly Disclosed
• 990-T requirement for unrelated business income
  of 1,000 or greater

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990-N

• Simplified filing available to classes
• Requirements
• Average 3 year gross receipts 50,000 or less
• All receipts, including proceeds from sales of
  securities
• For groups in existence less than 3 years,
  different rules apply
• Maintain a copy of gross receipts calculation

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990-N Details

• IRS filing administered by The Urban Institute
• Computer based
• Link to the filing available on the IRS website
• After setting up profile, you will receive a
  confirmation email
• Check spam folder if confirmation not received
  quickly
• If notified of rejection, file Form 990-EZ

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990-N Details

• Information Required
• Organizations DBA name (Dartmouth Class of XXXX)
• Mailing address (Blunt Hall)
• Website (if any)
• EIN
• Name address of principal officer
• Organizations Tax Year (June 30, 2013)

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990-EZ

• Schedules required in addition to core form
• Schedule A (Public Charity Status)
• Schedule E (Schools)
• Schedule O (Other information)
• Schedule B (Contributions) if one or more
  contributors gave 5,000 or more
• Schedule G (Fundraising) if special events
  revenue exceeded 15,000

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990

• Required schedules are the same as for 990-EZ
• Form 990 is complex and unique to each group
• If required to file, we recommend consultation
  with a tax adviser.

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IRS Notices

• Failure to file
• Missing or incomplete information
• Missing Schedule A or E
• Required boxes not checked
• Contact Alumni Office or Controllers Office
  (Tax_at_dartmouth.edu) for assistance if needed.

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Financial Best Practices

• Annual review of by-laws to make sure the Class
  is complying with the by-laws, including formal
  documented meetings
• Keep accurate records of all revenues, expenses,
  and assets
• Bank accounts should use the class EIN and have
  at least 2 officers listed as signors for all
  accounts
• Reconcile all bank accounts, investment accounts,
  and cash funds at least annually
• If the class has a substantial amount of activity
  in the treasury, it may be advisable to arrange
  for an audit of the books periodically.

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Financial Best Practices

• Treasurers Report
• The Treasurer should give a financial status
  update at every board meeting and, ideally,
  provide quarterly reports.
• At the end of the fiscal year, a final report
  should be generated and presented to the Board.
• Copies of the final report should be sent to
  Alumni Relations to maintain historical records.
• Merchant Accounts
• If you accept credit cards, make sure you have
  procedures in place that are PCI compliant