vision2020
Re: Friends of the Library
However, FOL and any other non-profit group should also know two
other things for financial safety.
1. The tax ID number itself does NOT grant tax-exempt status.
However, the IRS does NOT require any filing to receive tax-exempt
status if the organization has GROSS receipts each year of not more
than $5000. That means if your group buys, for example, $6000 in
Christmas trees, and sells them for $10,000, thus earning a PROFIT of
$4000, you need to file because your gross receipts were $10,000.
2. If your group is not yet earning $5,000 per year, but may soon
increase its efforts so that gross receipts will exceed $10,000 per
year, file now and save some money. The filing fee to become a
recognized tax-exempt organization (often called a 501(c)(3)
organization after the section of the tax code that grants such
recognition) is $150 if annual receipts are under $10,000 while it's
$500 or so if annual receipts exceed $10,000.
So, the breakdown is as follows:
GROSS receipts: $0.00 to $5,000 no filing required
$5,001 to $10,000 filing required, fee $150
$10,001 and up filing required, fee $500
If filing is required, (or is contemplated so as to avoid any IRS
questions why a group has a tax number buy no return), a copy of the
Articles of Incorporation or Articles of Association and of the
Bylaws will be required to be attached. Sample (simple) forms are
available.
The application form to become a 501(c)(3) is Form 1023, which has
instructions with it. Form 872-C and 8718 are also needed. All of
them can be obtained and downloaded via the internet at the IRS web
site.
Although this sounds like an awful lot of paperwork, the IRS will
usually be very helpful, and if you will email me directly (off
V2020), I may be able to help some, having filed several of the forms
in the past.
There is also a filing with the State of Idaho that can be helpful
(and is very simple). Keep in mind that as of now Idaho does NOT
offer non-profits an exemption from sales taxes. I think there was
something about a stink over that in the MPDN a couple months back.
> From: "Sam Scripter" <MoscowSam@moscow.com>
> To: "Vision2020" <vision2020@moscow.com>
> Subject: Friends of the Library
> Date: Wed, 31 Mar 1999 10:09:17 -0800
> Tim ...
>
> Whew! What a story. You must really be incensed, and I
> don't blame you.
>
> An almost unbelievable story, especially for Moscow.
>
> In my case, the problem was a local bank, federal rules, and
> my bagpipe band.
>
> The band is paid for a few gigs we do each year. We keep
> the money in a bank account until we need to buy supplies
> such as reeds and additions to our non-uniform uniform..
>
> Eventually, after many years, the bank would not continue
> our account without a social security number or a tax id
> number. The latter we did not have, so another member
> of the band let us use his social security number.
>
> Than meant that the interest earned on our deposits were
> reported to the IRS, by the bank, as his income.
>
> It wasn't much, and the extra taxes he paid as the result
> was very small, but it was very unfair.
>
> We resolved it, finally, by filing for a tax id number as a
> not for profit organization.
>
> That worked beautifully. The number was awarded with no
> interchange with the IRS, just the original submission of
> their form.
>
> Has Friends of the Library considered doing what we did?
>
> With best regards,
>
> Sam Scripter
> MoscowSam@moscow.com
>
> -----Original Message-----
> From: Tim Hillebrand <thillebr@moscow.com>
> To: Vision2020 <vision2020@moscow.com>
> Cc: Daily News <editor@moscow.com>
> Date: Wednesday, March 31, 1999 9:33 AM
> Subject: Friends of the Library declared profit seekers by
> postal clerk
>
>
> >A postal clerk at the Moscow post office has taken it upon
> herself to
> >declare unilaterally that the Friends of the Library are
> not part of the
> >Library and, therefore, not a non-profit organization. For
> two days (so far)
> >she has held up a bulk mailing of the Friends newsletter
> announcing our book
> >sale April 10th at Eastside MarketPlace.
>
>
>
Mike Curley
reply to: curley@turbonet.com
208-882-3536
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