We started our club a little over a year ago, at that time I called several clubs asking how they handle their not or non profit status and tax returns.
I was told by all I called that we just open a back account in the club name with an EIN # and that's it.
Well IRS says that if your EIN number is
not listed with them as a tax exempt organization within 3 years the officers will be responsible for the clubs income as taxable revenue.
The clubs president has to call IRS and have them update your status before May 15th along with the responsible parties info......
Here's what I learned, if anyone can chime in with more info please do so we have a 2000 clubs here I wonder how many are doing their books correctly.
Any nonprofit organization with less than $25,000 in annual gross receipts did not have an annual filing requirement. That rule changed with the 990-N which requires that even these small organizations must file (note that there are exceptions for certain organizations such as churches).
Small social club organizations (for example, a softball league) fall under Section 501(c)(7) of the Internal Revenue Code. 501(c)(7) organizations include social and recreation clubs, organized for pleasure, recreation, and other similar nonprofitable purposes. If a social clubs chooses to be recognized officially as a tax exempt entity, they must file Form 1024 (Application for Recognition of Exemption Under Section 501(a)). However, filing this 1024 application is not required- it is optional.
The important point here is that whether or not a small organization, such as a social club, chooses to file Form 1024, the organization is still REQUIRED to file the Form 990-N at a minimum (unless it meets one of the exceptions, such as being a church). This is also true for a small 501(c)(3) organization that has less than $5,000 in gross receipts.
That small 501(c)(3) is not required to file a Form 1023 for application of tax exempt status, that small 501(c)(3) organization is still required to file the Form 990-N at a minimum.
When I say “at a minimum”, this means that if you have less than $50,000 in gross income in 2014, you file a Form 990-N. If you have more than $50,000 in gross income in 2014, you are required to file either the Form 990-EZ or the Form 990.
Remember if you don't file or you go three years without filing, the IRS will treat your organization as a taxable entity.
Guess the officers will need to pay up the taxes
