Re: 3 tax questions
DanJett@AOL.COM
Fri, 30 Apr 1999 16:42:24 EDT
Kevin Woods reports his unit treasurer was told that a nonprofit organization
with deposits over a certain amount must file a certain tax form.
Most non-profits must annually file form 990, a "tax" return of 6 pages, not
including any attachments. However an exception to the filing requirement
exists for organizations whose annual gross receipts are less than $25,000
which are defined as "the total amount it received from all sources during
its annual accounting period, without subtracting any costs or expenses."
There is some wiggle room for the $25k requirement during the organization's
first 2 years and after that a provision to look at the average of the past 3
years in case an org has unusually high receipts in a single year. If the
nonprofit has gross receipts during the year under $100,000 and its total
assets at the end of its year are less than $250,000, it may file the simpler
2 page form 990-EZ. It is correct that churches and their affiliated
religious organizations are normally exempt from the filing requirements.
Most states require a similar form to the federal 990 or allow a copy of the
990 to be substituted for the state form. The dollar limitations may differ
from state to state.
It is important to remember that nonprofit organizations are independent
legal entities (most are in fact corporations) which are subject to a variety
of regular government reporting requirements. Most of these requirements are
in place to insure that the organization is really operating for charitable
purposes and not for profit and to make the org accountable to the public
that allows it to exist. Even though little or no taxes or fees are assessed
by the feds and states to these entities, the burden of calendaring,
preparing and filing reports is too daunting for many to undertake and in
some cases there may be liability to the individual members and directors,
including delinquent fees, for failing to meet those obligations.
Dan Jett
Asst SM, Troop 14
Palo Alto, CA
Pacific Skyline Council
