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Nonprofit Law/Local chapter collecting dues for National

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Question
Members of our local branch are required to be members of National.  We collect annual dues and then pass the National portion along to headquarters.  Both groups are 501(c)3.  Are the National dues contributions to us? When we look at our financial statements, the income seems artificially high compared to our program expenses for scholarships.  We don't want to jeopardize our status by doing the books wrong.

Answer
You wrote that you only pass a portion of the dues to another 501(c)(3) organization.  Therefore, the part that is passed to the national are considered dues in form 990 series, to be listed in the appropriate line.

Links to Latest Published  Form 990 Series Forms and- Instructions
(990/990-EZ/990-N) are available at http://goo.gl/GFVHE
and http://goo.gl/CTkSR explains which 990 series return to file.

For example, for the 990-EZ, Part 1, line 3 is for "Membership dues and assessments".
http://www.irs.gov/pub/irs-pdf/f990ez.pdf

Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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