|Subject:||AMCA loses tax-exempt status - so do we!||Date:||Tue Nov 26 11:38:24 2013|
In a letter I received this morning...|
Dear Chapter Presidents and Newsletter Editors,
As the end of 2013 quickly approaches, we wanted to take this opportunity to remind you of the following tax-related subjects:
1) Throughout 2013, we discussed the possibility that the AMCA would lose its IRS tax-exempt status. Based on advice from our accountants, the AMCA National organization will no longer meet the IRS 507(c)(7) “safe harbor” requirements and will not be afforded the ability to file as a “tax-exempt” organization. We will be required by the IRS to file a Form 1120 business tax return for the 2013 year and forward. Because of this, all Chapters that had been afforded “tax-exempt” status for filing purposes because of the AMCA's IRS-approved group tax exemption will also lose their exempt status. This does not mean that your adopted and approved articles of incorporation are no longer valid. Rather, only your tax reporting status will change.
We discussed this matter before, but did not make a decision. The time has come. The Highlands Chapter has two choices:
A) Become a for-profit corporation, and pay normal federal and state income taxes. However, if we spend (Ladies Day, Christmas party) what we take in (membership dues) each year, we will have zero net income, so we will pay zero taxes.
B) Seek 501(c)(7) tax-exempt status for our Chapter. This will cost about $500. We would then never pay any taxes.
Let's discuss this at the FYBO this Saturday.