Louisville Bicycle Club

Louisville Bicycle Club Newsletter -- September-October 1996

Tax Exemption Update

by Jim Tretter, Treasurer

In 1974, the Louisville Wheelmen filed for incorporation as not for profit with the Commonwealth of Kentucky. A common misunderstanding is that this filing also implies exemption from all taxation. This is not the case.

Beginning in 1993, the Club thoroughly revised our accounting practices and instituted a much needed policy of budgeting and financial accountability reporting. Part of this undertaking included the study and comprehension of tax obligations for organizations such as ours with a commitment to become compliant with those regulations. In that regard, the Club started filing income tax returns in 1995 with both the Federal and Kentucky Revenue Departments.

In May 96 we filed an Application for Recognition of Exemption Under Section 501(a) with the Federal IRS. This section defines the many kinds of organizations that are exempt from paying federal income tax and the qualifications and privileges of each exempt organization type. Originally we filed for exemption under Section 501(c)(7) for Social and Recreation Clubs. The IRS informed us that due to certain revenue sources that the Club receives, we did not qualify under that exemption but suggested we change our application and file under Section 501(c)(4) for Civic Leagues and Social Welfare Organizations.

In late July we received a response from the IRS in which they determined we are exempt from federal income tax under section 501(c)(4) of the Internal Revenue Code.... Though no tax will be due, the Club is still required to file annual Income Tax returns and to operate within the IRS guidelines to maintain this tax exempt status.

As the Club operates today, we should have no problem meeting these requirements. It will be the duty of current and future elected officers to see that the Club continues to operate within these guidelines. It will be the duty of the membership to make sure that qualified officers are elected who can and will meet these obligations.

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Copyright 1996 Louisville Wheelmen

last updated: 30 August 1996
by Duc M. Do