This document provides information and guidance for local AIChE sections on accounting, taxes, and annual reporting obligations. It outlines that local sections are separate non-profit entities under AIChE that must file annual tax returns, either a Form 990-N, 990-EZ, or 990 depending on revenues and assets. It also notes that sections must pay taxes on unrelated business income over $1,000 and file Form 990-T, and that failing to file tax returns for three years can result in a section losing its tax-exempt status. The document reviews quarterly dues payments to sections and annual reporting deadlines.

1. Accounting & Taxes for Local
Sections
Local Section Leadership Workshop
Stetson Wilson
Controller
April 26, 2013

2. Agenda
• Local Section Structure
• Quarterly Dues Payments
• Local Section Benefits
• Local Section Obligations
• Annual Tax Return
• Unrelated Business Income Tax (UBIT)
• Implications of not filing annual tax return
• Additional information
• Questions

3. Local Section Structure
• Separate entities under the AIChE umbrella
• Share in the 501(c)(3) non-profit status of the
national organization, because:
– You share in AIChE’s exempt purpose of educating the
public on topics related to Chemical Engineering
– You are non-profit
• Maintain your own financials and account
balances
• Have your own Tax ID Number (EIN)
• Not included in AIChE’s financial statements, tax
returns or audits

4. Quarterly Dues Payments
• January - March
• April - June
• July – September
• October – December
Note: Paid to Local Section after quarterly/year-end
books are closed(typically within 2 months)

5. Local Section Benefits
• Most sources of revenue are exempt from
federal income taxes
• Sponsors and contributors (and LS members)
can claim deductions on their tax returns
• Reduced postage rates for certain types of
mailings

6. Local Section Obligations
• Maintain your finances in a responsible manner
• File annual tax returns
• Pay taxes on unrelated business income (UBIT)
• Abstain from lobbying – influencing elections of
candidates for public office
• Keep IRS and AIChE updated on current Treasurer
and LS mailing address
• Complete AIChE Local Section Treasurer’s report
annually
- May 31st
deadline

7. Annual Tax Returns
• Must be filed by the 15th
day of the 5th
month after
the end of your fiscal year
– May 15 for Jan-Dec fiscal year
• Which form to file?
– Form 990-N if gross receipts/revenues are < $50,000
– Form 990-EZ if gross receipts are < $200,000 and total
assets are < $500,000
– Form 990 if either of the 990-EZ criteria are not met
– Form 990-T if gross income from UBIT >$1,000

8. Form 990-N
• Referred to as e-Postcard
• Minimal information required:
– Legal name (and other names used)
– Mailing address
– Website (if it has one)
– Employer Identification Number (EIN)
– Group Exemption Number (GEN) - 2603
– Name and address of a principal officer
– Annual tax year
– Answers to the following questions:
• Are your gross receipts normally $50,000 or less?
• Has your organization terminated or gone out of business?
• Should receive confirmation back from the IRS

9. Unrelated Business Taxable Income (UBIT)
• Most receipts are exempt from taxes:
– Dues / contributions / sponsorships
– Fees for seminars, symposia, etc.
• Revenues from advertising may not be exempt if:
– Ads are included in >3 newsletters per year
– Outside entity is paid to help prepare / distribute the
newsletter (vs. volunteer support only)
– Gross income >$1,000
• Gross receipts minus cost of goods sold
• UBIT requires filing of Form 990-T

10. Implications of Non-Compliance
• Many LSs and SCs recently lost their tax-exempt
status for not filing returns for 3 consecutive
years
• Implications
– Contributors cannot deduct their donations from their
tax returns (including dues)
– Must pay income taxes on receipts
– Must file tax returns with the IRS
• Need to apply with the IRS to have their tax-
exempt status reinstated (including associated
fees)

11. Additional Information
• Form 990-N:
– http://epostcard.form990.org/
• Form 990-EZ:
– http://www.irs.gov/pub/irs-pdf/i990sa.pdf
• Form 990-T:
– http://www.irs.gov/pub/irs-pdf/f990t.pdf
• Change of Address (Form 8822):
– http://www.irs.gov/pub/irs-pdf/f8822.pdf
• AIChE Local Section Treasurer’s Report:
– https://chenected.wufoo.com/forms/aiche-
treasurers-report-for-local-sections/#public
• Group Exemption Number (GEN) – 2603