IRS Form 990-N
Posted by Warren Enos on 14 Mar 2008 | Tagged as: Chapter Support
GUIDANCE FOR CHAPTERS FACING FILING REQUIREMENT
The 11/07 edition of The Affiliate gave a “heads up” notice to chapters that they might be subject to the IRS filing requirements (IRS Form 990-N) for “small tax-exempt organizations.” I direct your attention to the specific IRS web page which covers this filing requirement:
http://www.irs.gov/charities/article/0,,id=169250.00.html. It brings up several issues that need to be addressed:
1. An “Employer identification number (EIN), also known as a Taxpayer Identification Number (TIN)” is required. I suspect that most of the Chapters do not have an EIN. Do we need to get one? If so, the application process for obtaining an EIN, as I recall from my CPA days, may require information that possibly only MOAA or CAL-MOAA has in its possession. If such is the case, can we count on MOAA and/or CAL-MOAA to help? Has anyone at MOAA Hq. researched this already and can provide guidance to chapters?
2. Chapters will have to establish a “Tax Year,” something that most of us have not had to deal with.
3. Filing requirements require naming a “principal officer.” What are the legal responsibilities and liabilities, if any, on the part of both the “principal officer” and the person who files the Form 990-N? In other words, what is our “exposure,” if any?
4. Since the IRS filing rules for Form 990-N provide the option of filing a “group return”, would it be appropriate for CAL-MOAA to file a “group return” covering the California MOAA chapters? Probably not….
5. To file IRS Form 990-N, the IRS directs the filer to access another website: http://epostcard.form990.org/default.asp. So far, I have been unable to ascertain whether, and how much, this company charges for filing the Form 990-N. Does anyone at MOAA know the answer? Have any of the MOAA bean counters worked their way through the 19 page PDF file http://epostcard.form990.org/frmTSFAQ.asp# included in this website to see which questions/issues might be addressable by MOAA Hq?
The bottom line is that I think that MOAA Hq. needs to be more pro-active on this issue, do the necessary detailed research, and then provide additional guidance to Councils and Chapters. Obviously, we all want to make this new filing requirement as painless as possible on the
MOAA chapters. So, any help that you can provide on this issue will be greatly appreciated.
CAPT Jim Torres, USN (RET)
CAL-MOAA Director, Area 2
*******
Jim - OK, let’s go down your list.
1. Our Policy and Procedures Guide recommends that all chapters incorporate as a non-profit organization in their state and seek tax exemption from federal taxes - including obtaining an EIN. In fact an EIN is generally required for the establishment of a chapter bank account unless a personal account is being used - we don’t recommend that. So all chapters should have an EIN but we know in practice they do not. Required guidance on this is in Section II, Chapter 1 of the Guide.
2. As for tax year, that’s up to each chapter to decide, but it makes sense to use the calendar year just like individuals do - especially with the relatively small amounts of receipts the chapters generally deal with. Keep it simple.
3. The principal officer can be any chapter officer designated to handle money for the chapter and deal with IRS requirements - hopefully the Treasurer. There are no other special qualifications. This person answers to the chapter only for his handling of chapter finances. And he is POC for IRS/chapter exchanges. So chapter leadership would be interested in this person following IRS guidance. His/her exposure would only come from violating IRS rules in some way.
4. Each chapter must file their own return based on their individual tax status.
5. There is no charge for filing the Form 990-N. You will be happy to know that we don’t have any bean counters here at MOAA - but I have gone through the PDF you refer to. While I don’t see any MOAA specific issues in the PDF, it’s clear that there is confusion out there on the Form
990-N issue. Basically, if you need to file, the IRS will (has) sent you a letter saying so. Confusion comes from chapters not knowing if they are incorporated or tax exempt - even if they are - because long ago records have not been passed on.
We’ll come up with some additional information on this whole issue to try to help. Our General Counsel is helping us with this issue - we recognize a new procedure is going to cause problems -we need some simple guidance to help chapters through this. Working now.
Col Lee Lange II, USMC-Ret
Director, MOAA Council and Chapter Affairs
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Help on Tax Filing Requirements
Last month we talked about filing requirements for the new IRS Form 990-N. This month we’ll try to simplify some of that guidance.
You need to file this electronic form (there’s no paper involved - it can be filed only via the Internet) only if your chapter or council has been declared tax-exempt by the IRS. The IRS has sent letters to all the tax-exempt organizations it knows about, advising them of this requirement, but if your chapter or council is tax-exempt, the burden is on you to file Form 990-N whether or not the IRS has notified you of the requirement to do so. Changes of address and changes in chapter/council leadership could easily result in an IRS postcard notice going astray.
If your chapter or council is tax-exempt and you have questions about this new requirement, you can e-mail the IRS at tege-eo-efile@irs.gov. This e-mail address is for exempt-organization electronic-filing-related questions only, not accounting or tax-law questions - do not send forms of any kind to this e-mail address.
Additionally, the IRS has provided these toll free numbers for non-profit and tax-exempt organizations that have technical questions:
- Tax-law questions - call 877-829-5500.- E-file technical questions - call the IRS e-Help Desk at
866-255-0654. The MOAA Policy and Procedures Guide recommends that a chapter incorporate as a non-profit organization in its state, and seek Federal tax exemption by applying to the IRS. This requires first obtaining a tax identification number, formally known as an Employer Identification Number, or EIN (even though the organization may have no employees). EINs are required for other functions as well, such as opening a bank account. See Section II, Chapter 1 of the Guide.
As for a chapter’s or council’s tax year, that’s up to each organization to decide, but it makes sense to use the calendar year, as most individuals do, especially with the relatively small amounts of funds that chapters and councils generally deal with. Keep it simple.
Please let us know if you have more questions by e-mailing us at chapters@moaa.org or calling the Council and Chapter Affairs Department at (800) 234-6622.
Col. Lee Lange, USMC-Ret.
Director, MOAA Council & Chapter Affairs
Greetings Fellow Chapter Presidents,
I am taking this opportunity to share with all Area 2 Presidents my response to Steve’s inquiry (see below) regarding how to implement the new IRS annual filing requirements for tax exempt organizations whose annual revenues are less than $25,000:
1. If a chapter is a “tax exempt organization,” it has an Employer Identification Number (EIN) issued by the IRS. If your chapter has not applied for, or received, from the IRS a “tax exempt” status and an EIN, it should, in most cases do so ASAP.
2. Regardless of whether a chapter has received a notice in the mail during the last few months from the IRS informing it of a new requirement to file an IRS Form 990-N annually, starting in 2008, the chapter must file a Form 990-N annually, starting in 2008, if it has and EIN.
3. Your chapter may never have updated its original filing as a “TROA” chapter to a “MOAA” chapter with the IRS. Your chapter may not have its current mailing address on file with the IRS. That is your fault, not the IRS. It is your responsibility to ensure that the IRS has you proper chapter name and current address. Just contact the IRS and find out, then submit any necessary corrections.
4. Once you have an EIN, an up-to-date name of your chapter, and a current address on file with the IRS, you need to formally establish a “Tax Year” for your chapter. In most cases, the calendar year ending Dec. 31st is established as your “Tax Year.”
5. Now, you are ready to file an IRS Form 990-N. Your next step is to find out the filing requirements. To do this, just click on: http://www.irs.gov/charities/article/0,,id=169250,00.html . It brings up the issues addressed above that you will need to deal with as you prepare to file the Form 990-N, including EIN, tax year, and naming of a “principal officer.”
6. As you read through this rather straight forward filing requirement in above website, you will be directed to the following website which you will use to actually electronically file your Form 990-N: http://epostcard.form990.org/default.asp .
Jim Torres
Director, Area 2
President, Contra Costa Chapter