TO: State Deputies, State Secretaries, District Deputies, Grand Knights, Financial Secretaries, Faithful Navigators and Faithful Comptrollers in the US
FROM: Knights of Columbus Legal Department
DATE: January 2020
RE: 2019 Tax Information for KofC Councils, Assemblies, & Chapters
This notice is to remind councils, assemblies, and chapters in the United States of their legal obligation to file an IRS Form 990 (informational tax return) for the 2019 tax year, and to provide detailed instructions on how to comply with this obligation.
The Knights of Columbus, including all subordinate councils, assemblies, and chapters (collectively referred to as councils), is a tax-exempt organization, recognized by the Internal Revenue Service as a fraternal benefit society under Section 501(c)(8) of the Internal Revenue Code. This tax-exempt status requires each council to file an annual Form 990 with the IRS.
Councils reporting gross receipts of $50,000 or less may comply with their obligation by filing the Form 990-N electronic postcard (also known as the e-Postcard). Councils with total assets of less than $500,000, and reporting gross receipts of more than $50,000 but less than $200,000, must file the Form 990-EZ. Councils with total assets exceeding $500,000, and reporting gross receipts of $200,000 or more must file the Form 990.
Deadline to file annual return (all forms)
Each council must file its own tax return; there is no group or consolidated Form 990 filing. The returns must be filed by the fifteenth day of the fifth month following the end of the council’s annual accounting period. For example, if a council’s accounting period ends December 31, it must file a tax return by May 15 of the following year; if a council’s accounting period ends June 30, it must file a tax return by November 15. Please note that the IRS assigns the accounting period to each council based on its Employer Identification Number (EIN). The IRS will not notify the council of the accounting period. To determine the accounting period assigned to your council’s EIN, sign into the IRS system with your userid and password. In our experience the assigned accounting period coincides with the calendar year.
Need more time to file a Form 990?
Although the IRS does not grant extensions for filing the Form 990-N (e-Postcard), the IRS will accept late filings if the tax return is received within three years of the due date. The IRS does grant extensions to organizations filing paper returns (Forms 990-EZ and 990). A council needing more time to file the 990-EZ or 990 return must request an extension at least one month before the due date. For example, if the council’s accounting period ends December 31, it must request an extension no later than April 15; if the council’s accounting period ends June 30, it must request an extension no later than October 15. Federal law imposes a penalty of $20 per day, up to a maximum of $10,000, or five percent of the council’s gross receipts, whichever is less, for incomplete or late filings. In order to request an extension, councils must submit, Form 8868, which is available on the IRS website: http://www.irs.gov/pub/irs-pdf/f8868.pdf. For councils reporting gross receipts of more than $50,000, we recommend using a qualified tax professional to file Form 8868.
Where to file
Form 990-N (e-Postcard)
The Form 990-N (e-Postcard) must be filed online. In order to utilize the online filing system, all new users must complete a registration, even if the user was previously registered under the old system (pre-2016).
The User Guide for the IRS Form 990-N Electronic Filing System is available here: USER GUIDE Form 990-N (e-Postcard)
The Form 990 e-Postcard Electronic Filing System is available here: CLICK HERE TO FILE Form 990-N (e-Postcard)
Forms 990-EZ and 990
The IRS website provides forms and instructions for filing paper returns, Forms 990-EZ and 990: https://www.irs.gov/charities-non-profits/current-form-990-series-forms-and-instructions
For councils reporting gross receipts of more than $50,000, we recommend using a qualified tax professional to prepare and file these returns. You may find e-filing instructions here: https://www.irs.gov/e-file-providers/e-file-for-charities-and-non-profits
If the IRS website will not allow you to file a Form 990-N
The electronic filing system for the Form 990-N (e-Postcard) may not accept a council’s return if: (1) the council EIN has been revoked for failing to file for three consecutive years; (2) the council’s EIN has recently been reinstated; (3) it is a new council; or (4) the council is not on the Supreme Council’s Group Exemption List (updated continually by the Knights of Columbus Legal Department). If you are unable to e-file, please contact the Legal Department by email at email@example.com. You can also contact the IRS customer service at 1-877-829-5500.
Information Available on IRS Website
We suggest you visit the IRS home page for tax-exempt organizations. It is an excellent resource for council officers who have questions or need information regarding their federal tax obligations: https://www.irs.gov/charities-non-profits
We also suggest you visit the IRS web page explaining the annual electronic filing requirement for small exempt organizations: http://www.irs.gov/Charities-&-Non-Profits/Annual-Electronic-Filing-Requirement-for-Small-Exempt- Organizations-Form-990-N-(e-Postcard)
More information is also available on the Knights of Columbus website. Sign in under “Officers” and click on the “Forms” tab. By clicking on the icon next to “Form 990 Information” you will find a detailed memorandum on tax compliance, along with attachments.
Compliance Guide for Tax Exempt Organizations
In addition to the annual filing requirement, each council is also responsible for conducting its affairs in a manner that is consistent with what is expected of tax-exempt organizations. Failure to do so may result in a council losing its tax-exempt status. In this regard, councils may wish to consult an IRS publication entitled Compliance Guide for Tax Exempt Organizations, which provides helpful guidance: https://www.irs.gov/pub/irs-pdf/p4221nc.pdf
If you have questions relating to your council’s tax reporting obligations, please contact the Knights of Columbus Legal Department by email at firstname.lastname@example.org
Additional materials relating to United States federal tax compliance as well as many other topics affecting your council or assembly can be found on the Officer’s Desk Reference (ODR). For a user name and password to the ODR, please contact Customer Service at 1-800-380-9995.