Old old charitable organization

[schirallicpa]

This is truly the year of new problems for me. 

I have been given an organization that's been around since 1937.  No 990 of any sort ever filed.  They have even had a payroll at one point, and they have their EIN, organizing documents,, etc.  They are on the NYS DOS listed as a domestic not-for-profit.  But no letter from the IRS saying they are exempt.  I attempted to put them in the 990N system and got an error message. Am I going to have to apply for exempt status?

[Margaret CPA in OH]

I'll be happy to read responses.  My church was incorporated in 1867 and obtained an EIN many decades ago for employee purposes - before one had to file for TE status.  From time to time we are asked to provide our TE determination letter.  I have looked into the work to actually get it but it is so expensive so we decline.  At least we can point to our state charter as a religious institution so not for profit.  It's a bit annoying when there are apparently no means to acknowledge 'pre-existing' conditions when laws change.

[schirallicpa]

Margaret - thanks for your input.  I will note though - churches themselves do not have to file 990s. So would a church get a TE letter from the IRS?  Or would they just have the state level registration and possibly an EIN.  I haven't dealt with any churches.  (Although the way this year has gone, someone will come knocking tomorrow)

[Abby Normal]

44 minutes ago, schirallicpa said:

Margaret - thanks for your input.  I will note though - churches themselves do not have to file 990s. So would a church get a TE letter from the IRS?  Or would they just have the state level registration and possibly an EIN.  I haven't dealt with any churches.  (Although the way this year has gone, someone will come knocking tomorrow)

Often churches fall under the tax exemption of a regional group or diocese that has a TE status.

There is a Quaker (Religious Society of Friends) meeting in a nearby town that is part of the Philadelphia Quaker group (Philadelphia Yearly Meeting). An IRS agent drove by and ended up investigating the meeting, mostly because he'd never heard of Quakers. Ridiculously, it took the meeting more than a year to get the IRS off their case, even though the IRS is right there in Philadelphia and surely someone has heard of the Quakers.

The Quaker organizations are usually set up as monthly meetings, quarterly meetings and yearly meetings, but that's a carryover from early days.

[Margaret CPA in OH]

A church would have to file 990-T if ubit was in play.  That's at least ONE reason I have been keeping some members from pushing for leasing space to for profit entities.  My church has been asked by a bank and other vendors occasionally for the determination letter.  We do fall under the umbrella of the Presbyterian Church USA but do not have a separate exemption letter and it is really not worth going to the national office to try to get a copy.  Fortunately it has not been an insurmountable problem as I can easily submit a sales tax exemption letter produced by the state and, if needed, a copy of our registration with the SOS office.  Just a bit annoying to be even asked for a determination letter as a church and part of what many consider main line for over 150 years.

 

[DANRVAN]

7 hours ago, schirallicpa said:

I have been given an organization that's been around since 1937.  No 990 of any sort ever filed. 

Have you tried the IRS TEO search?  https://apps.irs.gov/app/eos/

[schirallicpa]

Actually I had tried the TEO search and found nothing.  I only found on NYS DOS.  

[schirallicpa]

Quote

 

From IRS

Annual Exempt Organization Return: Who Must File:

Every organization exempt from federal income tax under Internal Revenue Code section 501(a) must file an annual information return except:

A church, an interchurch organization of local units of a church, a convention or association of churches

An integrated auxiliary of a church

A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs

 

Quote

Quote

 

 

 

This organization is an auxiliary.  So maybe they were excepted.  Only now - we're in a situation where an investment firm has held funds for years and years and in order to get that money, the investment firm wants proof of exemption.  That's why we are on this road.  So - I'm kinda not sure which direction to go.

 

Also - don't ask me what I'm doing with all the quote things. 

[DANRVAN]

4 hours ago, schirallicpa said:

This organization is an auxiliary.

Out of curiosity, auxiliary to what type of organization?

 

4 hours ago, schirallicpa said:

the investment firm wants proof of exemption. 

It looks like they will need to apply for tax exemption.

[schirallicpa]

Auxiliary of the church.  It's actually for the cemetery maintenance.  A man donated land and money to our local RC church in the 1930's and the investment has always paid for the maintenance.  In fact the formal name is St. Mary's Auxiliary Association of Bolivar New York, Inc.  And everything has run along all nice and smoothly until someone at the investment firm wanted all the i's dotted.  

[DANRVAN]

40 minutes ago, schirallicpa said:

Auxiliary of the church.  It's actually for the cemetery maintenance. 

Oh, that changes my answer.   per:  https://www.irs.gov/charities-non-profits/churches-integrated-auxiliaries-and-conventions-or-associations-of-churches

"Churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of section 501(c)(3) of the Internal Revenue Code are automatically considered tax exempt and are not required to apply for and obtain recognition of exempt status from the IRS."

So now what is the next step? If this was my local parish, I would furnish the above information to the investment group.

If that did not work, I would ask the CFO of our Diocese for help in resolving the matter. 

[DANRVAN]

We also have a lawyer on our finance committee that offers help with those types of issues.

[BulldogTom]

12 hours ago, DANRVAN said:

We also have a lawyer on our finance committee that offers help with those types of issues.

I always amazes me how red tape gets cut fast when the person writing the letter is a lawyer.   All the BS corporate requirements seem to fade away when the actual law is cited to someone enforcing corporate policy.

Tom
Longview, TX