so what exactly is our club's tax status?

Discussion in 'General Club Business' started by sfsuphysics, Jul 2, 2014.

  1. sfsuphysics

    sfsuphysics Supporting Member

    We are tax exempt or no? if we are which designation are we classified as?

    Seems like our club might be classified under California code 23701d "corporations operated exclusively for .. educational purposes"
  2. Spoon

    Spoon Guest

    Disregard. Sorry! :p
  3. denzil

    denzil Webmaster

    I don't personally know the status but @mray2660 might.
  4. dswong01

    dswong01 Supporting Member

    I believe the club is c4 when Rich applied for it via irs. He could not get the c3.
  5. sfsuphysics

    sfsuphysics Supporting Member

    The 501c4 was the federal tax exempt status, which I see that's for civic leagues, social welfare organizations, or local employee organizations and that corresponds to California code 23701-f. Which is eligible to hold raffles, so why don't we get an exemption letter from the franchise tax board?
    bluprntguy likes this.
  6. bluprntguy

    bluprntguy Webmaster

    It appears as though to get an exemption letter from the state franchise tax board, you have to submit your federal tax-exempt determination letter as an attachment. It looks like the determination letter was lost or no one knows what to look for, so someone needs to request a copy from the IRS, which will take 60 days.

    "Effective on or after January 1, 2014, organizations that are federally tax-exempt under Internal Revenue Code sections 501(c)(4), 501(c)(5), 501(c)(6), or 501(c)(7) may submit a copy of their Internal Revenue Service (IRS) tax-exempt determination letter to the Franchise Tax Board (FTB) to establish their state income tax exemption. Organizations that are tax exempt under 501(c)(3), may continue to submit a copy of the IRS tax exempt determination letter to the FTB to establish their state income tax exemption."
    Last edited: Jul 3, 2014
  7. sfsuphysics

    sfsuphysics Supporting Member

    Ah ok, we lost our letter... that's fine it happens. However we have not had raffles for a helluva lot longer than 60 days. Is there some reason it hasn't been done? Level of busy? Wanting to get away from raffle formats?
  8. FeliciaLynn

    FeliciaLynn Supporting Member

    Our application, which was why we had to wait 60 days, got rejected I believe. People have definitely been pursuing this so don't think we're not. Mike Ray was working hard on that and knows more details if you'd like to discuss that with him. In the meantime, I want to start doing more silent auctions, which are perfectly legal :)
  9. sfsuphysics

    sfsuphysics Supporting Member

    Gotcha, wonder why it got rejected since we did have the designation. I'm sure it's one of those silly things you put 'or' instead of 'and' then they deny you.

    Auctions are a whole different beast than raffles, but I wouldn't think they wouldn't bring as much revenue into the club. Oh well.
  10. mray2660

    mray2660 Treasurer

    Sorry that I did not respond to this posting as I did not see it until today. We filed with CAL FTB earlier in year and it was rejected because we did not have the copy of the IRS Letter. We have requested the IRS documentation. This can only be done in writing. Can not send email or verbal request, etc. I did contact the IRS and they said the typical response time for this type of request was running at about 90 days because of lack of staffing due to budget cuts. As of today it has been about 85 days since we filled the request.


    Mike Ray
  11. neuro

    neuro Webmaster

    man that is straight up hilariously tragic. thanks for poking at the issue for us mike!
  12. sfsuphysics

    sfsuphysics Supporting Member

    Hey thanks for the info Mike, that clears up a lot. So should get the information by next week right? :D

    Seriously find it odd that they have a time table for how long it would take to process a request to a get a letter. Lovely government efficiency "Yeah we can tell you approximately how long it takes to get your request handled, as well as having spent time to create a time table for length of requests, but typing a few numbers into a computer and hitting the print screen button well that takes too much effort!!" :D
  13. mray2660

    mray2660 Treasurer

    I deal with this everyday in my work. I am told this all the time. This is a typical response that I just recently received from the USDA. "As permit processing is workload-dependent and we are very short-handed at this time, unfortunately we cannot provide an exact timeframe for permit completion. However, feel free to check with us on the status at any time." I don't know and exact time we may hear from the IRS on our request as it may be beyond 90 days. If you remember the office that handles 501C applications was at he heart of the recent congress inquiry about the lost emails, etc.

    FYI one the reasons that we are this position is that we don't have a lot of the corporate documentation from previous boards. We have been trying to find what we can and reassemble what we don't have. This typically happens with volunteer organizations that is why we have been trying to put copies of all corporate documents on a club's Google drive for safe keeping so it can be handed down between boards.

    gimmito likes this.
  14. mray2660

    mray2660 Treasurer

    Update. I checked with IRS the other day. Apparantly they could not find our request for information. I will refill another request and will sent via certified mail. I am sorry that we have not gotten our tax status settle with the CA Franchise Tax Board. Due to state rules we need to file new request for raffles after to be held after 10/01. My gut tells me that we will not be able to have any raffles until after the first of the year. I will try to keep everyone updated on the status of our state and federal fillings.

    If you have any questions please feel free to contact me.
    neuro and bondolo like this.
  15. bondolo

    bondolo Supporting Member


    Thank you for the efforts in this. Tax paperwork is both tedious and demanding and you deserve commendations for your diligence!
  16. sfsuphysics

    sfsuphysics Supporting Member

    Holy crapballs, the IRS really is some piece of work. Oh you have to wait 3 months before they will process your letter... if they fricking don't lose it by then!

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