Compliance Accomplished for Reporting Obligation of NAGCR to IRS (US)

During the 2010 term, and on the strong and repeated urging of Guild Treasurer Rosalie Crouch, the Executive Committee authorized consultation with a tax professional to determine the Guild's US income reporting obligations and if necessary, to help bring the Guild into compliance with current US tax code regulations, particularly the Pension Protection Act of 2006. [As of 2008, for tax periods beginning after December 31, 2006, small tax-exempt organizations whose gross receipts are normally $25,000 or less (increases to $50,000 in 2011) and which previously were not required to file a return, may now be required to file an electronic 990-N with the IRS annually.]

A nonprofits specialist Certified Public Accountant was identified to review our situation and consult with the IRS initially. She then guided us into conversation with the appropriate IRS representative, which resulted in our being able to preserve the use of the original NAGCR tax identification number (avoiding the need to close several bank accounts and re-open new ones), being classified under the Code as a 501(c)(7) -- "social club", and retaining the option to apply for recognition as a 501(c)(3) at a later date.

Being categorized as a (c)(7) instead of (c)(3) for now allowed us to avoid the Form 1023 current filing fee of $850, as well as the requirement to receive at least 1/3 of our support from the general public (not including member fees/dues). While the Guild is "tax-exempt", this means only that it is not taxed on its income. It does NOT mean that donations to the Guild are tax-deductible for donors.

Under our current categorization, tax reporting requirements are annual, but minimal, so no professional tax return preparation should ever be required.

In addition to achieving resolution concerning the Guild's tax-exempt status, our CPA consultant has also made the Executive Committee aware that the Guild's foreign bank accounts (one Canadian and several in the UK) must be reported on US Treasury Dept Form 90-22.1 if the total balance across all accounts is $10,000 or greater at any time during any year. Going forward, it is therefore incumbent upon the Treasurer and all the Executive Officers to insure that funds accumulated in foreign accounts be monitored and transferred to US accounts on a regular basis in order to avoid the required reporting of a balance in excess of the no-report maximum, and the punitive penalties for failure to file.