Tax Update for Alumni ClassesSeptember 29, 2012

Hanover, NH

Dartmouth College

Tax Update Agenda

• Maintaining Tax Exempt Status• New in fiscal 2012• Filing Requirements• Filing Tips• IRS Notices• Financial Best Practices• Questions

Maintain Tax Exempt Status• Tax Exempt Status is granted through

membership in Dartmouth’s group exemption

• File Timely Annual Return

• Read and respond to any IRS notices promptly

• Don’t engage in activities outside exempt purpose

• Don’t support or oppose political candidates

• Provide copy of return if one is requested

New in Fiscal Year 2012

• Groups with gross receipts less than $50,000 meet the requirements to file Form 990-N, or “e-postcard”.

• If your group accepts merchant card payments you will receive form 1099-K for calendar year in January of 2013 for calendar 2012 credit card deposits.

• The IRS has revoked tax exempt status from several classes and clubs due to three years of consecutive non-filing of 990-series returns.

Filing Requirements• Annual Tax Filing is required to maintain tax exempt status• Failure to file may result in fines of $20 per day past due date

to max. of 5% of gross receipts• Failure to file for 3 years will result in loss of tax exempt status • All forms are due November 15, 2012

(extension can be filed – form 8868)• Important to maintain accurate records of revenue and

expenses to fulfill your fiduciary duty, document requirements for filing, and provide accurate reporting

Filing Requirements

Gross Receipts and Assets IRS FormGross receipts under $50,000 990-N

Gross receipts less than $200,000 and total assets less than $500,000 990-EZ

Gross receipts $200,000 or greater 990

Total assets $500,000 or greater 990

Required IRS form is based on criteria below:

Informational Returns

• No Tax – 990-N no penalties for late filing– 990-EZ and 990--Subject to fines and penalties for

failure to file• Publicly Disclosed• 990-T Requirement for unrelated business

income of $1,000 or greater

• Simplified Filing Available to Alumni Classes• Requirements– Average 3 Year Gross Receipts $50,000 or less• Fiscal 2011, 2010, 2009 • All receipts from all sources not reduced by any

expenses• If group has been in existence for less than three years

different rules apply• Maintain a copy of gross receipts calculation

990-N

990-N Details

• IRS Filing Administered by Urban Institute• Computer Based• Set up profile, receive confirmation email• Feedback– Check your spam folder if you do not receive a

quick reply– Rejection—not on IRS records• File a 990-EZ

990-N Details • Information Required– Organization’s DBA Name (Dartmouth Class of

XXXX)– Mailing Address (Blunt Hall)– Website (if any)– EIN– Name and Address of principal officer– Organization’s Tax Year (June 30, 2011)

990-EZSchedules Required in Addition to Core Form– Schedule A (Public Charity Status and Public Support)– Schedule E (Schools)– Schedule O (Checkboxes)– Possibly Schedule B (Contributions)• If one donor gave $5,000 or greater

– Possibly Schedule G (Fundraising Activities)• If special events gross revenue > $15,000• Reported on line 6a of main 990-EZ form

990

• Required Schedules– Same as 990-EZ

• Form 990 is complex and unique to each group. • If required to file, we recommend consultation with

a tax adviser.

IRS Notices

• Failure to file• Missing or incomplete information– Missing Schedule A or E– Required boxes not checked• Schedule B

• Contact Alumni Office or Controller’s Office (Tax@dartmouth.edu) for assistance if needed

Financial Best Practices• Annual review of by-laws to make sure your Class is complying

with the by-laws, including formal documented meetings

• Keep accurate records of all revenues, expenses, and assets

• Bank accounts should use the class EIN number and have at least 2 officers listed as signors for all accounts

• Reconcile all bank accounts, investment accounts, and cash funds at least annually

• If the class has a substantial amount of activity in the treasury, it wouldn’t hurt to arrange an audit of the books periodically.

Financial Best PracticesTreasurer’s report: • The treasurer should give a financial status update at every

board meeting and, ideally, provide quarterly reports.

• At the end of the fiscal year, a final report should be generated and presented to the board.

• Copies of the final report should be sent to Alumni Relations to maintain historical records.

Merchant Accounts• If your class accepts credit cards, make sure you have

procedures that are PCI compliance

Questions

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