Not Necessarily Model A - Horseless Carriage Club's Non-Profit Status Threatened

[Mike in NRN IN]

Worth reading -
Horseless Carriage Club’s non-profit status threatened

http://blog.hemmings.com/index.php/2...ed/?refer=news

[2manycars]

If they had not changed their status to make donations tax deductible, none of that would have happen. It is not a move to try to kill the hobby, it is about following the rules of the game, and keeping good records.

[BRENT in 10-uh-C]

Before we all start hollering The Sky Is Falling, we need to realize that is just one person's (the tax person) opinion and it is not gospel. Appeals and courts would likely overturn that person's decision when the intent of the entire club is realized. Also, changing to that status is not necessarily a bad thing simply because it costs a great deal of money to properly run any type of organization whether it be a for-profit venture or a non-profit organization. Donations are a necessary part of operations for a non-profit entity.

As a national board member of another antique car club, we have had similar discussions and I feel a very strong argument that would carry a lot of weight is just how these educational activities being carried out by that club. Amost every member affixes a decal on their car so when they are at a show or driving, they are promoting HCCA. That car owner (which HCCA is serving) discusses his car with someone who has a shared interest, he is educating that individual. HCCA's biggest expense is their magazine, The Gazette and it is full of educational information relevent to the mission statement of HCCA. Another big expense for them is providing a website which is very educational. Also the promotion of tours where attendees stop at different locations in all locales while on tour exploring new sights in their vintage cars. The sole purpose of a club is to serve & educate their membership base and I think many would say that the HCCA is doing that very satisfactorily in that regard!

Closer to home in the case of AACA and MAFFI, both are providing educational facilities for the membership and general public, --which both MARC & MAFCA are strong proponents of the new Model A museum at Gilmore. Both the Model A News and the Restorer are chocked full of educational material in all areas, and both National Meets provide excellent seminars for the attendees. Then there is the joint venture of the Judging Standards and Restoration Guidelines which s meant to be educational for the Model A enthusiest. Both of our clubs are doing everything required as far as education is concerned.

Again, IMHO this was a IRS agent making a very judgmental call based on his own personal opinion and based on the writer's version of this, I am thinking legal council would overturn his opinion very hastily!

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[Arlen]

The IRS came after the Dallas club a couple of years ago. Our club works at two seperate fund raisers each year which helps pay for the rental of the building where we hold our monthly meetings, our Christmas party, tours, and a few other bills. The IRS didnt care and in the eyes of the government, our local car club is now a corporation....

[BRENT in 10-uh-C]

Originally Posted by Arlen

The IRS came after the Dallas club a couple of years ago. Our club works at two seperate fund raisers each year which helps pay for the rental of the building where we hold our monthly meetings, our Christmas party, tours, and a few other bills. The IRS didnt care and in the eyes of the government, our local car club is now a corporation....

They're correct, ...it should have been a corporation all along. Think about it Arlen, --if the entity (i.e.: Dallas club) was earning money no matter what the intended use was for, it was a business venture. Somewhere, somehow our government expects a tax to be paid on those earnings. There are however, circumstances in which the IRS will allow exceptions to this taxation but they need to know the person/persons (club) actually meets the qualifications of those exemptions in section 501 of the Internal Revenue Code. That means they grant a charter (a priveledge) for the club to be exempt however the club must follow those specific guidelines and also file an annual report verifying to the IRS they still qualify. One of those guidelines is the group of people must become incorporated, --or what is commonly called a Corporation. No biggie however it does require a few sheets of paper to be filed each year.

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[eswanson]

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As a pastor of a large church that deals with taxes and the joys of the IRS all the time I can tell you that incorporation is no big deal and is a great thing to have done. Also if you do feel that you are going to make a profit, you can simply set up a taxable organization to go along with your 501c3 and have it bear the tax liability. We did that when we have rented out space (parking lot spots can be profitable in larger cities). None of it has to be the end of the world, just the begining of a few file folders.

Eric

[ABento]

Looks to me the irs agent doesn't know what he's doing, putting these vehicles in parades and shows and other local activities generally is enough to keep thinks neat, the ATHS has around 21000 members is a 501 c 3 and we get along just fine doing basicly the same thing.