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Your Club and the IRS
By Karen Weigt
Published January 1995 in "Across the Fence,"
Wisconsin Federation of Stamp Clubs, APS Chapter 350
karenweigt@cs.com
Information provided here is for reference purposes. Your state may be different. Check with local authorities for specifics.
Our federation's president, Greg Schmidt, discussed a tax-related matter that will culminate for the WFSC
within the next few months. Perhaps it's a timely topic for local stamp clubs, too.
It all begins when your club opens its first checking or savings account. The Internal Revenue Service now
knows you exist, and you are obligated to reckon with them.
To simplify a complicated topic, most local stamp collecting societies qualify as tax-exempt organizations
under internal Revenue Code section 501(c)(7), described as social and recreation clubs. You can attain this
status by submitting IRS Application or Recognition of Exempt Form 1024, and it is a relatively easy
procedure. The IRS responds with a determination letter. Thereafter, unless your income in any one year
should exceed $25,000 you may or may not be required to annually file a token Form 990-T.
A word of warning: ALWAYS KEEP TKACK of your determination letter and the Employer Identification
Number (EIN) you receive when that first checking or savings account is opened. Your club's EIN is
comparable to your personal Social Security Number, whether or not you ever actually employ someone.
The WFSC is awaiting final determination for IRS 501(c)(3) status, described as a religious, educational,
charitable, scientific, etc., organization. This application procedure is exceedingly more complex, but offers
greater benefits. Most significantly, donors are allowed a lax deduction for contributions made to you, it
grants eligibility for state sales tax exemption, and helps to qualify for preferred postal rates, I've been
advised that it's practically impossible for a local club to achieve this status, but it has been granted to many
state and regional philatelic organizations.
More tax status information can be found in IRS "Publication 557 Tax Exempt Status for your
Organization." Check your local telephone directory for the nearest IKS office and an 800 number. The IKS
will mail you this publication at no charge. They'll also send you an application form. Ask for Form 1028 for
a 501(c)(7) or comparable status.
Next time, I'II discuss incorporation, which is handled through the Wisconsin Secretary of State and has
almost nothing to do with IRS tax status.
Here's a comprehensive listing of all other forms related to filing for tax-exempt status. The number
following the form number and description is the IRS publications catalog number:
(1) Form 1028, Application for Recognition of Exemption (#17138N)
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(2) Instructions for filling out Form 1028(#17139Y)
(3) Publication No. 557, Tax Exempt Status for your Organization (#46573C)
(4) Form 990-T, Exempt Organization/Business Income Tax Return (#11291J)
(5) Instructions for filling out Form 990-T (#11292U)
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