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TIN:
SCHEDULE O
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
(Form 990 or 990-EZ)
Department of the Treasury
Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ
Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
Attach to Form 990 or 990-EZ.OMB No. 1545-0047
2010
Open to Public
Inspection
Inspection
Name of the organization
SAE Alumni House Management Association
Employer identification number
91-6063112
91-6063112
| Identifier | Return Reference | Explanation |
|---|---|---|
| Form 990, Part VI, Line 19 | Form 990, Part VI, Line 19: Other Organization Documents Publicly Available | Forms 1024 and 990 are available upon request. |
| Form 990, Part VI, Line 11 | Form 990, Part VI, Line 11: Form 990 Review Process | Officers will be presented with a copy of the return for review before filing. |
| Form 990, Part VI, Line 5 | Form 990, Part VI, Line 5: Description of Material Diversion of Assets | Nature of Diversion:In June of 2011 it was discovered that a member of the governing body had made improper diversions of assets for personal benefit. Three series of personal loans were made from the operating account of the organization directly to the board member.Amounts involved:February-April 2006: $7,000March 2008: $7,000October 2009-January 2010: $5,700Corrective Actions:The unauthorized loans were repaid. The board member was removed from both his office and the board for cause. A self-audit of the books was conducted immediately following his removal to verify all wrongfully diverted funds had been repaid. This process was concluded in November, 2011. Measures were then put in place to assure quarterly financial reports are presented to the board, and annual reports to the organization's members. |
| Client Note 1 - Statement of Reasonable Cause for failure to meet 6113 disclosure requirement under IRC 6710(b)___________________________________________________________________________________The Association's solicitations did not contain disclosure required by IRC Section 6113. The Association meets the reasonable cause exception provided by IRC Section 6710(b) and therefore is not subject to the penalty imposed by Section 6710(a).Detailed Statement of Facts______________________________SAE Alumni House Management Association is a 501(c)(2) organization with annual gross receipts normally exceeding $100,000. It is not described in section 170(c). The Association solicits donations via written pledge cards annually, typically in March of each year. IRC Section 6113(a) requires that all solicitations from the Association contain an express statement that contributions or gifts to the Association are not deductible as charitable contributions for Federal income tax purposes. The Association did not include the required disclosure on its fundraising solicitations.The Association is run 100% by unpaid volunteers, none of whom is knowledgeable in tax law. It hired reputable and competent CPA firms experienced in preparation of Tax Exempt income tax returns to prepare its annual Form 990-EZ, Short Form Return of Organization Exempt From Income Tax. The Association furnished the CPA firms with all necessary and relevant information to prepare the tax returns and to advise the Association that the disclosure requirement of Section 6113 was applicable to the Association's solicitations.The Association engaged the services of a different CPA firm, White Thompson & Co. PS (WT) to prepare its 2010 Form 990. When preparing the 2010 Form 990, WT asked the Association if its solicitations contained the disclosure required by IRC Section 6113. The Association was not even aware of the disclosure requirement until WT inquired about it. Upon learning of the disclosure requirement, the Association took immediate action to insure that future solicitations contain the requisite disclosure to comply with IRC Section 6113.Law and Analysis__________________IRC Section 6710(a) imposes a penalty for failure to meet the requirement of section 6113 with respect to a fundraising solicitation by (or on behalf of) an organization to which section 6113 applies. IRC Section 6710(b) provides that no penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.Reasonable and good faith reliance on a tax advisor competent on specific tax matters constitutes reasonable cause when the taxpayer furnishes the advisor with all necessary and relevant information to make a determination. Rev. Rul 72-27, C. R. Linback Foundation v. Commissioner, 4 T.C. 652, 667, affirmed, 3 Cir., 150 F.2d 986; Dayton Bronze Bearing Co. v. Gilligan, 6 Cir., 281 F. 709.Compliance and disclosure for tax exempt organizations is complex. The volunteer board acted in good faith to comply with all requirements by hiring reputable and competent CPA firms experienced in preparation of Tax Exempt income tax returns. The Association furnished the CPA firms with all necessary and relevant information to prepare the tax returns and to advise the Association that the disclosure requirement of Section 6113 was applicable to the Association's solicitations.The Association timely filed its federal income tax returns. In addition, it complies with payroll tax reporting and payment obligations for its single employee. It files Form 1099 when required. This demonstrates that the Association acts in good faith and in an absence of willful neglect in other tax matters.As soon as the Association became aware of the disclosure requirement of IRC Section 6113, it took steps to comply with the requirement.Conclusion_____________The Association has reasonable cause for not meeting the disclosure requirements of IRC Section 6113 provided by IRC Section 6710(b) and respectfully requests waiver of the penalty imposed by IRC Section 6710(a). |
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.
Cat. No. 51056K
Schedule O (Form 990 or 990-EZ) 2010
Additional Data
| Software ID: | 10000105 |
| Software Version: | 2010v3.2 |