Every chapter files a version of the IRS Form 990. The specific version is determined based on the total gross receipts and assets of a chapter. Gross receipts are the total revenues the chapter received from all sources during its tax year, without subtracting any costs or expenses. The chart below will help you identify the version of the Form 990 your chapter must file.
|Gross Receipts and Assets||Form 990 Version|
|$50,000 or less.||Form 990-N (e-Postcard)
Search 990N on www.irs.gov to find the User Guide and instructions.
|Greater than $50,000 but less than $200,000 and assets < $500,000.||Form 990-EZ or Form 990
Search 990EZ on www.irs.gov to find the form and instructions
|Gross receipts >$200,000 and/or Assets >$500,000||Form 990
Search 990 on www.irs.gov to find the form and instructions
Note: Be sure to include 0309 on the Form 990 as the group exemption code when filing.
Additionally, the chapter must file a Form 990-T if gross income from “unrelated trade or business” is greater than $1,000. IRS defines gross income as gross receipts minus the cost of goods sold. This can include earnings from the Chapter Investment Fund and payments received from non-members. This form is available at www.irs.gov.
Tax returns are due on the 15th day of the 5th month after the chapter’s tax year-end. If a Chapter’s tax year ends June 30, the tax form would be due November 15 (the 15th of the fifth month after June 30). If you aren’t sure of your year end, contact Jennifer Meals, Finance Director at 804-823-9349.
Chapters can avoid the tax on investment income only by following IRS procedures called “set-aside.” This IRS provision (originally written in a case for Sigma Phi Epsilon Fraternity in 1969 which still stands as IRS ruling for all fraternal organizations) allows organizations to “set aside” net investment income for charitable, religious, scientific, or literary or educational purposes.
In other words, you can deduct all expenses for educational purposes from your CIF earnings (e.g. Balanced Man Scholarships, educational programming, facilities or materials, registrations for Carlson and Conclave and cost of sending members to Carlson and Conclave, etc.). Every chapter can document it pays $1,525 per year in Carlson and Conclave registration fees plus any expenses paid by the chapter to attend, all of which should be deducted (“set aside”) to offset otherwise taxable investment earnings.
Here’s an example of “Set aside”:
CIF taxable earnings
- Set aside Carlson and Conclave registration fees
- Set aside hotel and travel expenses for Carlson
Net taxable income
Income Tax Due
The educational set aside expense can be paid from chapter operating funds without impacting CIF. It is treated as an offset to earnings.