[LeArc] ARNewsline #1708 -- May 7 2010: TAX LAW: IF YOU ARE A 501C RADIO CLUB YOU MUST FILE A FEDERAL TAX RETURN

[Jesse Risley]

ARNewsline #1708 -- May 7 2010:


Amateur Radio Newsline™ Report 1708 - May 7 2010

TAX LAW: IF YOU ARE A 501C RADIO CLUB YOU MUST FILE A FEDERAL TAX RETURN

If you are a radio club that holds federal government tax exempt status, listen up. You are in danger of loosing that standing unless you file a tax statement with the Internal Revenue Service by May 15th. So says the ARRL in a special bulletin issued earlier this week. Bruce Tennant, K6PZW, has the details of what federally tax exempt clubs have little time to do:

Changes made three years ago to federal tax laws could cause many radio clubs to lose their tax-exempt status this year. To protect themselves, clubs that are tax-exempt under Section 501(c) of the Internal Revenue Code must file the required IRS annual returns or reports before the deadline, which is May 15th for those organizations with corporate calendar years. 

Many clubs have, at some time in the past, applied for tax-exempt status under Section 501(c)(3) as charitable organizations, Section 501(c)(4) as civic leagues or Section 501(c)(7) for recreational clubs. Years ago, any club with gross receipts averaging less than $25,000 per year was not required to file annual returns with the IRS. However, after 2006, such clubs have been required to file a Form 990-N. This is a simple postcard with minimal information. It is due by the fifteenth day of the fifth month after the close of each fiscal year. 

Some clubs may not have been aware of this new requirement or didn't bother to comply. Even those that filed in a prior year may have neglected to keep up with the required filings as officers changed from year to year. 

Well it turns out that Section 6033(j) of the Federal Tax Code provides that failure to file Form 990, 990-EZ or 990-N for three consecutive years results in revocation of an organizations tax-exempt status as of the filing due date for the third return. That filing date for calendar year 2009 is less than two weeks away. 

If you are a club officer and are uncertain who is responsible for IRS filings or whether such filings are current, you should determine your fling status as soon as possible and take immediate steps to file the current and any missed prior-year IRS forms. Going forward, your club's board should assign the responsibility for compliance filings with a designated officer and document that responsibility in the written job description for the position so that subsequent holders of the office are made aware of the requirements. This is the only way to make certain that you tax exempt status remains in place.

For the Amateur Radio Newsline, I'm Bruce Tennant. K6PZW, in Los Angeles.

The bottom line: If you have questions about your club's status, you may wish to consult a Certified Public Accountant or other tax advisor versed in not-for-profit tax law. (ARRL)