TU is a publicly supported 501(c)(3) organized under a group exemption and, because of this, the IRS requires that each subordinate entity (chapter or council) under the exemption keep their own EIN and file their own tax forms (called Form 990, although a few versions of the 990 exist) with the IRS.
However, TU National pays our accounting firm to file 990-Ns for all chapters and councils that normally have gross receipts less than $50,000 (e.g. $50k or less on average over the past three years, including the year you’re filing for).
Chapters or councils with gross receipts normally $50,000 or more on average over the previous three years must electronically file the following Forms with the IRS annually on or before Aug. 15:
– Gross receipts < $200,000, and Total assets < $500,000 = Form 990-EZ or Form 990
These forms are long and sometimes complex, so get help (from an accountant experienced with non-profit orgs.) if you are not comfortable.
– Gross receipts ≥ $200,000, or Total assets ≥ $500,000 = Form 990
These forms are long and sometimes complex, so get help (from an accountant experienced with non-profit orgs.) if you are not comfortable.
There are additional, separate requirements for reporting “unrelated business income.” If a nonprofit’s gross proceeds from unrelated business income exceed $1,000, that income must be reported to the IRS using Form 990-T. If your chapter or council conducts a revenue-generating business, and the gross revenue from that business exceeds $1,000, you should consult with your chapter’s accountant regarding whether that revenue constitutes unrelated business income. The most common examples of unrelated business income include advertising income from the sale of ads in newsletters and magazines, revenue generated from fishing trips that are not educational or conservation-oriented, and fees collected for the use of facilities or land owned by the organization where the use of the property is not directly related to the exempt purpose of the organization. Revenues from raffles, banquets, auctions, and other sales of donated merchandise generally do not count as unrelated business income.
All required IRS Forms 990, 990-EZ, 990-N, and 990T must be filed by the 15th of the 5th month after your chapter or council’s fiscal year end. For TU chapters and councils, required forms are due to the IRS on August 15 of each year. If a chapter or council fails to file the correct form for three years running, the IRS will revoke the chapter or council’s exempt status. Be sure to educate new leaders about the foregoing requirements and guidelines.
Once you’ve filed Form 990, 990-EZ, and/or 990-T:
- Upload a copy to the “Electronic Documents” area of the Leaders Only Section.
- Send of a copy of your Form 990/990EZ/990T via e-mail to Q Collins, Volunteer Governance & Reporting Manager, at q.collins@tu.org.
TU staff will be tracking this and will be in contact with leadership to ensure all chapters and councils file.
Check with your state tax authorities for local state filing requirements. If you have additional questions about tax filing requirements, please contact TU’s volunteer operations staff.
OTHER IRS RELATED REQUIREMENTS
If your chapter or council is large enough to file a Form 990, you will be asked specific questions about your board governance, policies and practices such as whether you have a document retention policy in place, a conflict of interest policy, a whistle blower policy, if you document your meeting minutes, if you have your entire board review your Form 990 before submitting it, etc… For more information about these questions, visit: www.irs.gov/pub/irs-tege/governance_practices.pdf or visit www.tu.org/financialreporting for sample policies.
Another IRS requirement for TU chapters and councils is to be sure that you have the necessary language in your donation letters. According to the IRS, this includes:
– Written acknowledgment required to substantiate a charitable contribution of $250 or more
– Name of the organization (i.e. your chapter or council)
– Amount of cash contribution
– Description (but not value) of non-cash contribution
– Statement that no goods or services were provided by the organization, if that is the case
– Description and good faith estimate of the value of goods or services, if any, that organization provided in return for the contribution
A sample letter can be found by clicking the link at the bottom of this page.
TAX EXEMPTION RESTRICTIONS
TU’s 501(c)(3) status, or charitable status, is one of TU’s most important assets. Among other things, this status allows donors to deduct their charitable contributions to your chapter or council, to the extent allowed by law. 501(c)(3) status is a status granted to charitable groups by the IRS. It is separate from being a not-for-profit corporation. Chapters and councils of TU come under the umbrella of TU national’s group 501(c)(3) tax-exempt status. This is one of the reasons chapters and councils report their financial status to national each year and use the same fiscal year as national. In order to maintain this status, you should be sure to report any change in your status (such as incorporating) or a new Employer Identification Number to volunteer operations staff promptly.
Learn more about the critical requirements to maintaining 501(c)3 status here.
IRS Donor Acknowledgment Letters
Written acknowledgment is required to substantiate a charitable contribution of $250 or more. Make sure you know what your chapter or council is required to provide donors.
Additional Policies and Controls The IRS Form 990 includes several questions focusing attention and governance practices on accountability and transparency. Be sure to review these sample policies such as conflict of interest and whistleblower, and strongly consider adopting versions of them at the local level.