A question primarily for treasurers.

[dolebludger]

I know this is the "President's Forum". But many of us who are not current presidents read and post on it (I'm only a director and membership chairman).
So this one is primarily for treasurers, but anybody else with the answer is very welcome to respond.

I know that our Sections are of that type of "non-profit, non-charitible" organizations that pay no income tax on funds received from the dues of the members. And, if our Section has a successful fund raising event, we can donate the money to an IRS approved charity and have no taxes to pay.

But what would be the tax ramifications should our section raise some money other than dues and chose to spend it on a car related and/or social event for our members, for which we would not charge our members any extra? Would our Section have Federal income tax liability on that portion of the non-dues income that we spend on member activities?

[JimVillers]

Richard ..... You raise two issues; when is a non-profit required to file a tax return and when may they be liable for paying taxes. I believe that the first is $25K gross revenue and the latter is more difficult to answer. If non-member income becomes a significant percentage of member revenue, then you need to seek professional advice. A couple of thousand should not be an issue.

The 190SL Group faced this issue after we published a book. We needed to track the sales and profit of book sales to non members for tax issues.