Dartmouth College Alumni Leaders Preparing Your Class Club

Dartmouth College Alumni Leaders Preparing Your Class, Club or Group Tax Return October 10, 2018

Agenda 1. Welcome and Introductions 2. Overview of Tax Exemptions 3. Inclusion in Dartmouth’s Group Exemption 4. Maintaining Tax Exempt Status 5. New and important reminders in Fiscal 2018 6. Filing Requirements 7. Filing Tips 8. IRS Notices 9. Questions

Introductions Rachel Williamson, Sr. Tax Analyst Tax@Dartmouth. edu 603 -646 -0034

Overview of Tax Exemptions What does it mean to be a tax-exempt organization? Income tax exemption Federal State Sales tax exemption

Inclusion in Dartmouth’s Group Exemption Why be included in Dartmouth’s Group Exemption? Can a class, club or group (club) obtain exempt status without being a part of Dartmouth’s group exemption? How does a club come to be included in Dartmouth’s Group Exemption? Can a club use a year end other than June 30? Can a club use Dartmouth’s sales tax exemptions? What happens when a club has lost its tax exempt status, typically due to failure to file?

Maintaining Tax Exempt Status Timely file the required Annual Return Read & respond to any IRS notices promptly Do not support or oppose political candidates Provide a copy of the Annual Return if one is requested Follow the constitution of the club

New in Fiscal 2017 and Important Reminders The 990 -N (e-postcard) is hosted by the IRS. There were no major changes to the Forms 990 or 990 -EZ. Remember Form 990 -EZ filers are not required to electronically file the return. 990 -EZ filers cannot electronically file a short period return unless it is marked as either an initial or final return. 990 -EZ filers that need to change the accounting period must file the short period return on paper. Form 990 -N filers that need to change the accounting period must either file Form 990 or 990 -EZ on paper, file Form 1128, or send a letter to the IRS explaining the change in accounting period. Form 990 -N filings are only available when the club’s average gross receipts are less than $50, 000. Average gross receipts are calculated using the current year and two immediately preceding years’ gross receipts.

Reminders (continued) The State of New Hampshire does not require an annual filing as long as contributions are solicited only from the club members (including spouses and matching contributions from employers). The Attorney General’s office is tasked with protecting “the public’s interest in the property and assets committed to charitable purposes in the State”. Dartmouth cannot provide advice relative to the state filing requirements for clubs active in other states. Each class/club is responsible for providing acknowledgment letters to contributors for each contribution in excess of $250. Acknowledgment of non-cash contributions should merely identify what was donated (i. e. professional services), but not the value. It is the donor’s responsibility to determine and substantiate the value of the donation.

Filing Requirements Annual Federal tax filing is required to maintain tax exempt status Failure to file Forms 990 or 990 -EZ when required may result in fines of $20 per day past the due date to a maximum of 5% of gross receipts. There is no monetary penalty for failure to file Form 990 -N (e-postcard) This does not mean that an organization need only file once every three years Failure to file for 3 consecutive years will result in the loss of tax exempt status Forms are due November 15. Clubs that need to file Forms 990 or 990 -EZ can file an automatic extension of time to file using Form 8868. There is now only one extension and it is for six months. Clubs that file Form 990 -N cannot file for extension, though there is no penalty for late filing.

Filing Requirements (continued) Gross Receipts and Assets IRS Form Three-year average gross receipts less than $50, 000 990 -N Annual gross receipts less than $200, 000 and total assets at year end less than $500, 000 990 -EZ Annual gross receipts $200, 000 or greater, or 990 Total assets at year end $500, 000 or greater 990

Filing Tips Forms 990, 990 -EZ and 990 -N are informational returns, no tax is assessed Form 990 -N has no penalties for late filing Forms 990 and 990 -EZ are subject to penalties for late filing Form 990 -T is an income tax return and must be filed when gross receipts of unrelated business income is $1, 000 or greater. Form 990 -T filing could also trigger state income tax filing Form 990 -series returns and most schedules are publicly disclosed and must be made available upon request. Schedule B is not open to public disclosure. Use the Treasurer’s Report as the basis for the preparation of the return. Reunion activity as well as ordinary class activity should be reported on both the Treasurer’s Report and the tax filing. Filing instructions and samples can be found on the Alumni website

Filing Tips – 990 -N Simplified filing Requirements: Average 3 year gross receipts $50, 000 or less All receipts, including proceeds from sales of securities For groups in existence less than 3 years, the average gross receipts test is calculated differently Maintain a copy of gross receipts calculation, in the event of an audit

Filing Tips – 990 -N (continued) Details for new filers: IRS filing is administered by the IRS Computer based, no paper filing is available A link to the filing is on the IRS website; be sure to follow the steps in the User Guide All filers must register at IRS. gov prior to filing for the first time on the IRS website, After populating the personal information screen, you will receive a confirmation code via e-mail Check spam folder if confirmation not received quickly Be sure to choose “Exempt Organization” in the “user type” field New organizations may need to call the IRS for additional assistance with first time set up The legal name should be “Trustees of Dartmouth College”, since the class/club is part of the Dartmouth group exemption The class/club name should be used as the DBA

Filing Tips – 990 -N (continued) Details for returning filers: IRS filing is administered by the IRS, you can no longer use Urban Institute Computer based, no paper filing is available A link to the filing is on the IRS website; be sure to follow the steps in the User Guide All filers should use the username set up during the initial registration at IRS. gov in the prior year. The EIN should bring up Trustees of Dartmouth College, because the class/club is a part of Dartmouth’s group exemption. Use your class/club’s name as the DBA

Filing Tips – 990 -N (continued) Information required EIN Tax year (June 30, 20 XX) Organization’s Legal Name should be Trustees of Dartmouth College (because you are filing as a part of Dartmouth’s group exemption) Mailing address (e. g. Blunt Hall) DBA name (e. g. Dartmouth Class of XXXX) Name and address of principal officer(s) Website (if any) Confirmation that the organization’s annual gross receipts are $50, 000 or less If applicable, a statement that the organization has terminated or is terminating

Filing Tips – 990 -EZ Schedules required in addition to core form REQUIRED FOR ALL 990 -EZ FILERS Schedule A (Public Charity Status) – All eight pages must be filed, even if mostly blank Schedule E (Schools) – Use the language provided in the sample Schedule E Schedule O (Other information) REQUIRED FOR THOSE 990 -EZ FILERS MEETING CERTAIN FILING THRESHOLDS Schedule B (Contributions) if one or more contributors gave $5, 000 or more individually Schedule G (Fundraising) if special events revenue (e. g. auction) exceeds $15, 000

Filing Tips – 990 Required schedules are the same as for Form 990 -EZ Form 990 is complex and unique to each club If required to file, we recommend consultation with a tax advisor

IRS Notices Failure to file Missing or incomplete information Missing Schedule A or Schedule E Required boxes not checked Contact Alumni Office or Controller’s Office (Tax@Dartmouth. edu) for assistance if needed

Questions?