[AGA-sc] Emmendation of draft Treasurer's report

["S. Hieber" <shieber@yahoo.com>]

I plan to add the following text at the end of the
Treasurer's report:

"
Summary of Tax Status

To the best of my understanding, this is the history of the
AGA?s attempts to be recognized as a nonprofit and
tax-exempt corporation.

The Aquatic Gardeners Association, Inc. incorporated in
Massachusetts in October 2001. In 2003, AGA received word
that Massachusetts recognized AGA?s nonprofit status. An
application was also submitted to the IRS requesting
federal recognition of AGA?s nonprofit and tax-exempt
status as a charitable organization under Internal Revenue
Code (IRC) Section 501(c)(3), which section applies to
organizations whose ?purposes are charitable, religious,
educational, scientific, literary, testing for public
safety, fostering national or international amateur sports
competition, and the prevention of cruelty to children or
animals.? AGA had requested recognition as a charitable
organization whose primary purpose was educational. As an
example of the relevance of IRC Section 501 (c) (3) to an
organization like the AGA, the American Cichlid
Association, Inc. recently received federal recognition
under IRC Section 501 (c) (3) as a charitable nonprofit
educational organization.

As David Lass previously reported to the Board, The IRS
responded to the AGA?s application by saying that the AGA
should submit a new application under IRC Section 501 (c)
(7), which section applies to social clubs. Under the IRC,
?social club? means one ?organized for pleasure,
recreation, and other similar nonprofitable purposes and
substantially all of its activities must be for these
purposes?; ?receives not more than 35% of its gross
receipts, including investment income, from sources outside
of its membership?; and ?of the 35%, not more than 15% of
the gross receipts may be derived from the use of the
club's facilities or services by the general public or from
other activities not furthering social or recreational
purposes for members.? 

An application requesting recognition of tax-exempt status
under IRC Section 501 (c) (7) was submitted in August 2004.
The application requested recognition of tax-exempt status
from the date of incorporation. We are awaiting a decision
from the IRS on the AGA?s tax status. Depending on the
IRS?s decision and the years for which tax-exempt status is
recognized, taxes might be due and the IRS might assess
fines for late payment of taxes. The IRS might also assess
fines for late filings of annual tax statements required of
taxable and tax-exempt organizations.


"


sh


=====
Want to get dirty but stay clean? 

Diana Walstad, author of _Ecology of the Planted Aquarium_ will discuss soil 
supplemented aquarium substrates at the 2004 AGA Convention.

Convention Details/Registration at aquatic-gardeners.org & gwapa.org
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