Rotary and Form 990N Return of Organization Exempt from Income Tax

Before Filing Each Club must have its own EIN

Who Must File? Although a ‘Subordinate Organization’ of Rotary International Each Club must file its own return

Which Form? Form 990? Form 990EZ? Form 990N?

Form 990  Normal Annual Gross Receipts ≥ $200,000 Or  Total Assets ≥ $500,000

Form 990EZ $50,000 $200,000

Form 990N Normal Annual Gross Receipts ≤ $50,000

A Definition Gross Receipts – amounts pledged or given to the club during the accounting year

Another Definition Normal Annual Gross Receipts ≤ $50,000 3 conditions 1. In existence for ≤ 1 year & gross receipts ≤ $75, In existence 1 to 3 years & average gross receipts ≤ $60, In existence for at least 3 years and average gross receipts ≤ $50,000 for immediately preceding 3 years

Examples

Rotary Club of Big Small Town  Organized September 5, 2012  Received Cash$70,000 Other Property 1,000 $71,000

Rotary Club of Big Small Town  In existence less than 1 year  Normal Annual Gross Receipts ≤ $75,000  Files 990N

Paradise Evening Rotary Club  Organized June 11, 2011  Gross Receipts 2011$73, , (so far) 35,000

Paradise Evening Rotary Club  In existence more than 1 year & less than 3  Average gross receipts = $46,500 for the first 2 years  Normal Annual Gross Receipts < $60,000  Files 990N

Big Old City Noon Rotary Club Situation 1  Organized in the last century  Gross receipts 2010$ 4, , ,000

Big Old City Noon Rotary Club – Situation 1  In existence more than 3 years  Average gross receipts = $49,667 for the last 3 years  Normal Average Gross Receipts < $50,000  Files 990N

Big Old City Noon Rotary Club – Situation 2  Organized in the last century  Gross Receipts 2011$ 45, , ,000

Big Old City Noon Rotary Club – Situation 2  In existence more than 3 years  Average Gross Receipts for last 3 years = $73,333  Normal Annual Gross Receipts > $50,000 but > $200,000  Files 990EZ

How to File  Only electronically  Go either to or

Information Necessary to File  Organization’s name – Rotary International  Other name used – ex. d/b/a Kearney Dawn Rotary Club  Club’s mailing address  Club’s website  Club’s EIN  Club’s principal office – the president  Organization’s tax year – calendar year  Club’s annual gross receipts  Is the club still a going concern?

When is the 990N considered filed  Must be filed electronically Paper return not accepted as a filed 990N  From 990N must be complete An incomplete Form 990 is not accepted as a filed 990

When is Form 990N complete?  All applicable lines are complete  Each question is answered unless the instructions direct not to answer  Entries are made on all lines requiring an amount even if that amount is 0  Explanations are provided as instructed

Filing Late  IRS will send notifications if return is not filed on time  There is no penalty for filing a late 990N

Failure to File for 3 Years If a club fails to file Form 990N for 3 consecutive years it will LOSE its TAX EXEMPT STATUS as of the filing date of the third year

Reinstatement of Tax Exempt Status  Form 1024, Application for Recognition of Exemption Under Section 501(a) must be filed  Form 8718, User Fee for Exempt Organization Determination Letter Request, must be filed  Form 8718 fee must be paid at the time of filing  Currently the fee is $850