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Maintaining IRS Tax-Exempt Status

Application for Exempt Status

For ACS Chapters to obtain exemption from United States federal tax under either Section 501(c)(3) or Section 501 (c)(6), a chapter must file the appropriate tax exemption application with the Internal Revenue Service (IRS), together with a copy of organizational documents (articles of incorporation or association), chapter bylaws, and recent financial statements. The organizational documents and bylaws describe the purposes for which the chapter was formed, and contain other provisions that affect the chapter’s qualification for exempt status. Most chapters have these documents on file at the College, and Chapter Services should be contacted should you need assistance with locating copies of your chapter bylaws and/or articles of incorporation.

Filing Tax Returns Regularly with the IRS

Even after tax exempt status is established with the IRS, and the chapter has been assigned an Employer Identification Number (EIN), it is important that a chapter file annually with the IRS on Form 990 or Form 990EZ. Helpful information may be found on the IRS website, which will answer many questions that you might have about non-profit status, what type of form to file, and when to file your chapter tax return.

Failure to File Regularly with the IRS

If Form 990 or 990EZ is not filed each year with the IRS, than the chapter may be assessed penalties by the IRS. Failure to file for (3) consecutive years will result in revocation of tax-exempt status as of the filing due date for the third return. Chapters whose exemption is revoked must then reapply with the IRS for reinstatement by filing a new application and pay a user fee. However, reinstatement for tax exempt status may be a lengthy process for a chapter, so it is imperative that the chapter administrator or chapter secretary file the proper form with the IRS each year to maintain the chapter’s tax exempt status. The IRS website also offers more information on revocation of exemption and reinstatement.

For more information, please contact Luke Moreau, Chapter Services Manager, at lmoreau@facs.org or 312-202-5737.