Registered: Jun 2008
Location: Burlington, CT
Posts: 1758

I have visited a couple clubs lately that had some confusion over non-profit status, which is of course of particular concern during "tax time". One thing everyone should know is that "non-profit" does not necessarily mean "tax exempt"!!!

Here's what needs to have occurred to be tax exempt:

1. You needed to incorporate in your state and request and prove non-profit status.

2. Once incorporated, you need to acquire a Federal Employer Identification Number or EIN, because you are now a business.

3. Once that is acquired, you need to file for tax exempt status, with the Federal IRS.

4. If/when approved, you need to go back to your state and request tax exempt status, from your state (in most states). This is because businesses (and individuals) are required to file income tax with your state and the federal government. Unless you are tax-exempt, and achieving it at the federal level does not mean the state recognizes it.

The reason this matters, is because you are required as a business (if incorporated) to file taxes, unless you are tax-exempt. AND if you don't the officers of the business are liable for any legal infractions.

So... if I were in a club, especially if I was an officer, I would probably check on my tax-exempt status before not filing taxes. By the way, this does not mean you don't file anything! Even a tax exempt organization still needs to file what is called a Federal Form 990N, and most states also require some document be filed.

As they say on the radio, "I am not offering legal advice!", just some lessons learned from a fellow hound and tree dog organization.

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David Schmidt
219-614-0654

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Registered: Jun 2008
Location: Burlington, CT
Posts: 1758

BTT

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David Schmidt
219-614-0654

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