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GWRRA/Finances and the IRS

Special Note:  This document contains general information that relates to the IRS.  For specific questions relating to UBI, please consult your local tax expert.

General Information
There are 25 different types of non-profit 501 organizations.

GWRRA is recognized as exempt from federal income tax under section 501(c)4 of the Internal Revenue Code.

Our not-for-profit status does not mean we are not allowed to make a profit.  It simply means that certain parts of our income are exempt from being taxed.

501(c)3 is a charity, and donations to these organizations are tax deductible.

Donations to GWRRA may be a legitimate business expense, but they are not tax deductible contributions.

The 501(c)4 is a different type of organization, mostly concerned with social welfare such as education.

GWRRA qualifies for the 501(c)4 as a result of Rider Education, Leadership Training and the variety of seminars and opportunities for education that we provide.

Checking Accounts II
As a subordinate to an exempt association, a Region, District, or Chapter is required to acquire a Federal EIN.  This number is used for banking and identification purposes.

All checking accounts must be non-interest bearing.

Checking accounts should have at least three signatures on the bank card – the Director, the Treasurer, and the Director’s appointing Officer.

Two of the signatures are required on the check.  If the parties are not in close proximity, each check written by any of the signatories on this account must have prior written approval from one other signatory, and this document must be kept on file.

Contact from the IRS
If Form 990 is mailed to you by the IRS, you must fill it out and return it regardless of the amount of your gross receipts.  If gross receipts are less than $50,000, the box indicating annual gross receipts are $50,000 or less should be checked; sign and return to the IRS.

Form 990 is an informational form and, as such, does not require payment of taxes.

If you receive a letter stating GWRRA notified the IRS that you are no longer a subordinate, call the Home Office at 800-843-9460. This situation can typically be resolved with a phone call to the IRS.

An EIN (Employer Identification Number) is simply the business equivalent of a social security or tax ID number.

An EIN means you are registered with he IRS and intend to collect income or have expenses that are not related to GWRRA.

Each subordinate must acquire their own EIN, but all subordinates should use GWRRA’s Group Exemption Number (GEN) on all forms submitted to the IRS.  The GWRRA GEN is 7196.

Use IRS form SS-4 to obtain a new EIN.  www.irs.gov.  If the Chapter, District or Region already has an EIN, it stays with it and NEVERchanges.

e-Postcard Form 990-N
The IRS requires that the e-Postcard (Form 990-N) must be filed annually by all subordinates (Chapters, Districts, and Regions) of GWRRA whose gross receipts are $50,000 or less for the tax year.  Your tax year must have ended before you can file an e-Postcard.  It is absolutely necessary that the e-Postcard be filed with the IRS.  Failure to do so can cause penalties and fines or even the loss of GWRRA’s not-for-profit status.  It is the responsibility of the Officer to be sure this form is filed on-line by May 15 of each year.  However, it may be filed by the Assistant Chapter Director or the Treasurer under the direction of the Chapter Director.

To access the e-Postcard site go to https://www.irs.gov/990n.  Once there, you will need to complete a three-step process:

  1. Register as a new user.  If you have filed in the past, go to step 2.  You will be assigned a login ID based on your EIN.  The first login ID will be your EIN plus the number 01.  You can have more than one login ID to allow others to access the site.  Subsequent IDs will be 02, 03, and so on.
  2. Create the Form 990-N (e-Postcard)
  3. Submit your Form 990-N (e-Postcard)

e-Postcard Rejection
If your e-Postcard is rejected, there is an explanation on the screen as to why it was not accepted.  It could be you entered the EIN incorrectly, or the EIN you entered does not belong to your Chapter.  Double check your entry to be sure it is correct.  You can call the Home Office to verify the EIN we have on file for your Chapter.

Another reason for rejection may be that you are not recognized as a subordinate of GWRRA.  This is likely due to Form 8822 (Address Change) not being filed with the IRS when the new Officer was instated.  It is extremely important that all incoming Officers fill out this form and mail it to the IRS as soon as possible.  This form may be obtained at www.irs.gov.

Information Needed to File the e-Postcard

  1. Your Employer Identification Number (EIN) sometimes known as a Taxpayer Identification Number (TIN).
  2. The tax year.
  3. Legal name and mailing address.  Example:  Chapter AZ-A; District AZ; Region F
  4. Name and address of a principal Officer.  (The Chapter, District, or Region Director)
  5. Website address if the subordinate has one.
  6. Confirmation that the subordinate’s annual gross receipts are normally $50,000 or less.

Receipts and Audits
Receipts are the only way to justify debts or withdrawals from a Chapter, District, or Region checking account.

The IRS could demand records be submitted at anytime for any subordinate of GWRRA.  At the Home Office, we conduct random research to assure accuracy and that policies are being followed.

It is important for all Officers to protect themselves from undo scrutiny.  The policies in the Officers’ Guide Book are there for the Officer’s protection.

Related Business Income
Related Business Income must be “Regularly carried On”.

Examples of Related Business Income:
Rallies, poker-runs, dice runs, hobo stew runs, 50/50 drawings, raffles, white elephant auctions (small games of chance held at organizational gatherings mainly for the membership), Goodie sales (GWRRA-related items: includes Chapter jackets, hats, shirts, all items with the logo on them etc.)

Subordinate Information
Regions, Districts and Chapters have no exempt status of their own and are recognized by the IRS as subordinates of GWRRA.

As a subordinate, they are required to follow certain guidelines.  Being exempt does not mean they do have to file a return, nor does it necessarily mean they will not be required to pay taxes.

Taxes and Gross Receipts
Subordinates must follow the guidelines put forth by the Federal Code for 501(c)4 non-profit organizations.

Subordinates with annual gross receipts of more than $50,000 are required to file the Form 990 “Return of Organization Exempt From Income Tax”.

Keep all receipts!  All Chapters, Districts and Regions are required by both the IRS and by the GWRRA to track and keep receipts of all income and expenses.

Unrelated Business Income
UBI is Gross Unrelated Business Receipts minus expenses.

If UBI is greater than $1,000, Form 990T must be filed with the IRS.

Because UBI is complicated, please check with your local tax advisors to determine if your income is taxable UBI.

GWRRA is unique in that all Officers and staff are volunteers and are not compensated.

Activities are considered Regularly carried On if they show a frequency, continuity, and are pursued in a manner similar to a comparable commercial activity of non-exempt organizations.

An activity or sale in which substantially all of the work is preformed for the organization without compensation is exempt from the UBI definition.  These two points exempt most Region, District, and Chapter income from the UBI category.

All subordinates of GWRRA must obtain an EIN from the IRS and must also send the IRS an address update when Officers change – Form 8822.

If gross receipts are more than $50,000, Form 990 must be filed.

If UBI is more than $1,000, Form 990T must be filed.

All information can be found in the Officers’ Guide Book section D.

Please ask your appointing Officer if you have any further questions or call the Home Office at  800-843-9460 or in Phoenix 623-581-2500.

Forms can be downloaded at www.irs.gov.

Gold Wing Road Riders Association
21423 N 11th Ave.
Phoenix, AZ 85027