4-H and taxes

And now for a serious moment here in 4-H - taxes. The state office has an update for 4-H clubs that I will quote here for you:

There will be no penalties for 4-H clubs earning less than $25,000 who do not file an ePostcard in 2008. Those earning more than $25,000 will continue to be subject to the 990 requirements for filing. The state anticipates having more details from the IRS when they have completed processing the database.

Chartered 4-H clubs and qualified affiliated groups under GEN 2704 should be contacting the State 4-H Office for all tax exempt issues and not National 4-H Headquarters or the IRS. The IRS has requested that any information and direction be provided from the state office to National 4-H Headquarters as the parent organization. National 4-H Headquarters then has the responsibility to provide updates, assistance, and respond to questions from State 4-H offices.

For all issues about status under GEN 2704, whether the group is requesting an EIN (SS-4 form) or inclusion under GEN 2704, or questions related to filing requirements, determination letters, or general status questions, all state and local groups should start with the State 4-H office.

In March 2008, National 4-H Headquarters forwarded to the IRS the listings of all authorized 4 H entities and has been waiting for the IRS to finish updating the list. The IRS has encountered delays in completing the processing of our lists for several reasons including: 1) there are far more entities requesting inclusion as subsidiaries than the IRS anticipated; 2) there continues to be significant errors with Employee Identification Numbers (EIN) listed for thousands of the 4-H entities certified; 3) the IRS is questioning the inclusion of some affiliated organizations which typically are considered independent organizations rather than program groups; and 4) there are questions on both the part of the IRS and National 4-H Headquarters regarding which requirements apply to 4-H, given that 4-H is a unique entity unlike any other organization.

The IRS is working to both clarify the actual tax exempt status for 4-H, and to identify ways to coordinate the lists of 4-H entities more efficiently and effectively in the future.

Due to the delays in processing the 4-H listings for groups requesting inclusion, and the data cleaning that will need to take place to correct the EIN's, National 4-H Headquarters has negotiated with the IRS that there will be no penalties for 4-H subsidiaries earning less than $25,000 who do not electronically file for the remainder of 2008.

Stay tuned for more updates as they become available. All questions need to be directed to the State 4-H office.