IRS tax every 5 miles

[OldJack]

In rural America there are old cemeteries in every direction within 5 miles of each other. Most of these cemeteries were once used by a church that no longer exists. Most of these cemeteries are now maintained by families of those distant relatives through small donations that mainly pay for someone to mow the grass.

Therefore, these thousands of cemeteries all have a trust fund or not-for-profit corporation to deal with the banking. Most if not all have *never* filed the actual forms to register with the IRS as "tax exempt" as they didn't even know they had too. All they did was get a federal EIN for banking.

Now, the IRS has declared that ALL exempt organizations (with gross receipts under $25,000) must file annually on the internet with what they call the "epostcard". If these cemetery organizations have never registered with the IRS they cannot file the annual epostcard (website will not accept the registration). To register now will cost them a $300 user fee of which is as much as their usually income for the year. What to do?

[joanmcq]

Are they actually incorporated? Sounds more like an associatation of some sort. Do they even have a filing requirement if NOT tax exempt with only $300 of income?

[OldJack]

Are they actually incorporated?

The particular Cemetery Fund that I have to deal with is a not-for-profit corporation with interest on a bank balance of around $12,000 @ 5% = $600+ income on a 1099INT plus occasional small donations. Most of the income is spent on the cemeteries each year with $200± profit/loss. However, I know there are thousands of cemeteries in my state that are probably trust funds that may not need to file but still would be required to register for exemption if they want to accept deductible contributions.

Doesn't everyone on this board have the same problem in their community?? Are you going to recommend those cemetery organizations pay the $300 user fee to register?

[Gail in Virginia]

I found this information on the IRS website under frequently asked questions. Rather than be late with the filing, or pay the $300, I would call the number mentioned and speak to them about your requirement. The only cemeteries I am associated with are either directly connected with churches, which eliminates their need to file, or they are small and do not claim to be tax-deductible. You can be a non-profit entity, and exempt from paying taxes, without contributions being deductible.

From FAQ on IRS site:

If you are certain that your EIN was entered correctly, the IRS may not have your organization listed as a tax-exempt organization. To be exempt under Section 501©(3) as a charity, most organizations must go through the application process. If your application for tax-exemption is pending, you must contact Customer Account Services at 1-877-829-5500.

If your organization claims to be exempt under some other Code section, such as 501©(4), an officer of the organization should call Customer Account Services at 1-877-829-5500 (a toll free number) and ask that the organization be set up to allow filing of the e-Postcard.

[OldJack]

You can be a non-profit entity, and exempt from paying taxes, without contributions being deductible.

Thanks for the phone number gailtaxed. I had called the number you mention as was listed on the website and I don't think the IRS person knew what I was talking about as he just wanted me to get a new EIN. Which I did but now realize that still doesn't get me on the website to file the epostcard.

My not-for-profit corporation client falls under code sec. 501-c-13. That is the cemetery companies code. As I read this includes corporations as well as trust funds that have been established for such cemetery purposes. The issue is not really if the corporation is exempt from income tax as it clearly comes under the code.

The issue is that Code §6033, [subject: Returns by exempt organizations] (a)(1) requires that all tax exempt "organizations" file an annual tax return (form 990 series). Of course the IRS has exempted in the past those with gross receipts under $25,000. Now that exemption is *ZERO* as those under $25,000 are required to file the epostcard. Yet, the IRS website will not allow those to file the epostcard unless they are registered which now cost $300.

[Gail in Virginia]

It is the first year for the procedure for the IRS as well, and apparently the person you got did not know what they were doing. You should not need a new EIN, you just need to be set up on the system for the e-postcard. And you should not have to file for recognition if you are a 501 ( c) 13 because donations to it are not deductible anyway. Good luck with finding the right person to talk to - and if it should turn out that the IRS website is wrong about what to do, please keep us all posted! :dunno:

[OldJack]

And you should not have to file for recognition if you are a 501 ( c) 13 because donations to it are not deductible anyway.

Well, maybe I am quoting the wrong code section. Anyway it should be deductible, look at the IRS pub:

IRS Publication 526, "Charitable Contributions", page 2 & 3:

Types of Qualified

Organizations

Generally, only the five following types of organizations can be qualified organizations.

1. ......

2. ......

3. .....

4. Certain nonprofit cemetery companies or

corporations.

Note. Your contribution to this type of

organization is not deductible if it can be

used for the care of a specific lot or mausoleum crypt.

[OldJack]

Update: I telephoned the IRS again and this time I got a nice lady that took the information on the phone and said that I will be able to epostcard file on the website as soon as processed in 6-8 weeks. That means my client does not have to pay the $300 fee.

[jainen]

>>my client does not have to pay the $300 fee<<

Good work, OldJack! By saving your client that $300 fee, you have easily earned your $350 retainer.

[OldJack]

Good work, OldJack! By saving your client that $300 fee, you have easily earned your $350 retainer.

Yes... my client's name is "Pro Bono" and he said the check was in the mail. He calls me only when it is a *rush job* and doesn't have time to talk. His bill for other works are getting way past due! Does anyone know his correct address or phone number? :blush:

[Jack from Ohio]

Yes... my client's name is "Pro Bono" and he said the check was in the mail. He calls me only when it is a *rush job* and doesn't have time to talk. His bill for other works are getting way past due! Does anyone know his correct address or phone number?

Your client owes me as well. Most of the money he owes came from other clients that he is ending up being billed for. Here are their names:

1) Can you wait a few days??

2) I forgot my checkbook...

3) I've been your client for many years...

4) It's been a tough year and I am a little short on cash...

5) You know I'm good for it.

6) I need to get my refund before I can pay you.

Please feel free to add to the list...

[JohnH]

7) You should let me slide because of all the referrals I've given you.

8) You'e got me owing so much to the government that you should be paying me for doing my return.

9) My last preparer would let me go 2 or 3 years before paying, and he's not complaining about what I still owe him.

[RitaB]

Yes... my client's name is "Pro Bono" and he said the check was in the mail. He calls me only when it is a *rush job* and doesn't have time to talk. His bill for other works are getting way past due! Does anyone know his correct address or phone number?

Wow, it's a small world. I finally got my Mr. Pro Bono's e-postcard thing filed yesterday. During the rejection process, I discovered that I had to be set up to e-file business returns. Who knew? But, at least now I will be in shape to better help all the other Bono family members.