Discussion:Non-Profit Member Lunches
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Discussion Forum Index --> Basic Tax Questions --> Non-Profit Member Lunches
Discussion Forum Index --> Tax Questions --> Non-Profit Member Lunches
| 3 November 2009 | |
| I have a Rotary International Chapter and I'm preparing their 990 EZ. I have a quick question regarding the lunches that the members pay for each week. How should I classify the payments for the lunches? Should I include it as a membership due and assessment on line 3? | |
| 4 November 2009 | |
| I do my Kiwanis Club 990EZ and I put the income from lunches on Line 6a and the meal cost on 6b. My predecessor did it the same way and it has never been questioned. Only the actual dues we collect from members go on line 3. | |
| 4 November 2009 | |
| I have seen this done, but how is the sales tax collected and paid by the club? | |
| 5 November 2009 | |
| If the lunches are subject to sales tax (which they may or may not be, depending on the state), the tax collected would be credited to a payable account, not to revenue or receipts. When the tax is paid to the state, credit cash and debit the payable. Never hits the income statement or the 990. | |
| 5 November 2009 | |
| I've never attended Rotary, nor have I ever prepared a 990 for a Rotary organization, but aren't the weekly lunches part of the Rotary program? Isn't that a fundamental part of the way they operate? Sounds like program service revenue to me, unless I misunderstand the purpose of Rotary lunches and the way they are carried out.
Special events revenue is generated by events that are held specifically to raise funds (other than contributions) to finance the organizations exempt activities. Are Rotary weekly lunches held to generate funds? Per IRS Form 990 instructions, special events and activities "do not include events or activities that substantially further the organization's exempt purpose even if they also raise funds. They do not include activities regularly carried on (except for gaming.) I would say that "weekly" lunches are regularly carried on. | |
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