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TO: State Deputies, State Secretaries, District Deputies, Grand Knights, Financial Secretaries, Faithful Navigators and Faithful Comptrollers in the United States
FROM: Knights of Columbus Legal Department
DATE: September 14, 2023
RE: 2022 Tax Information for KofC Councils, Assemblies, & Chapters
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This memo, which was previously distributed in February 2023, provides guidance for complying with your federal tax filing obligations.
If your council’s tax-reporting year is January 1 through December 31 and you have already filed your council’s 2022 Form 990, please disregard this memo. If your council’s tax-reporting year is January 1 through December 31 and you have not already filed your council’s 2022 Form 990, please do so as soon as possible.
If your council’s tax-reporting year is July 1 through June 30, Please remember that you are required to file your council’s 2022 Form 990 on or before November 15, 2023.
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This notice is to remind councils, assemblies, and chapters in the United States of their legal obligation to file an IRS Form 990 (informational tax return) for the 2022 tax year, and to provide detailed instructions on how to comply with this obligation.
The Knights of Columbus, including all subordinate councils, assemblies, and chapters (collectively referred to as councils), is a tax-exempt organization, recognized by the Internal Revenue Service as a fraternal benefit society under Section 501(c)(8) of the Internal Revenue Code. This tax-exempt status requires each council to file an annual Form 990 with the IRS.
Councils reporting gross receipts of $50,000 or less with less than $200,000 in assets may comply with their obligation by filing the Form 990-N electronic postcard (also known as the e-Postcard). Councils reporting gross receipts of more than $50,000 and less than $200,000 with total assets of less than $500,000 must file the Form 990-EZ. Councils with gross receipts of $200,000 or more and total assets of $500,000 or more must file the Form 990.
What’s New
The IRS now requires electronic filing for all tax-exempt organizations, regardless of which form they use. The online filing system, also known as “E-Services”, requires all new users to register or sign in with LOGIN.GOV or ID.me, the current IRS credential service providers.
There are two ways to access the Form 990-N Electronic Filing system: (1) Sign in with your active IRS username; or (2) Sign in/create an account with LOGIN.GOV or ID.me. Form 990-N filers who have an existing IRS username and register for a new Login.gov or ID.me account must use the email address associated with their IRS account. Refer to User Guide for the IRS Form 990-N Electronic Filing System. Instructions are available on the IRS website, links to which are in the Where to File section, below.
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Deadline to file annual return (all forms)
Each council must file its own tax return; there is no group or consolidated Form 990 filing. The returns must be filed by the fifteenth day of the fifth month following the end of the council’s annual accounting period. For example, if a council’s accounting period ends December 31, it must file a tax return by May 15 of the following year; if a council’s accounting period ends June 30, it must file a tax return by November 15. Please note that the IRS assigns the accounting period to each council based on its Employer Identification Number (EIN). The IRS will not notify the council of the accounting period. To determine the accounting period assigned to your council’s EIN, sign into the IRS system with your user ID and password. For most councils, the assigned accounting period corresponds to the calendar year.
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Need more time to file a Form 990?
Although the IRS does not grant extensions for filing the Form 990-N (e-Postcard), the IRS will accept late filings if the tax return is received within three years of the due date. While the IRS will accept late filings of Form 990-N (e-Postcard), please note that filing late, even within a three-year period, is still considered a missed filing by the IRS and may trigger a revocation of a council's tax-exempt status if for three consecutive years the council files late or fails to file a return. The IRS does grant extensions to organizations filing Forms 990-EZ and 990. If a council needs more time to file the Form 990-EZ or 990, it must request an extension by the due date of the return for which it is requesting an extension. Federal law imposes a penalty for late or incomplete filings. If an organization fails to file a required return by the due date (including any extension of time), it must pay a penalty of $20 a day for each day the return is late. In general, the maximum penalty for any late return is the lesser of $11,000 or five percent of the organization’s gross receipts for the year. In order to request an extension, councils must submit Form 8868, which is available on the IRS website: http://www.irs.gov/pub/irs-pdf/f8868.pdf. For councils reporting gross receipts of more than $50,000, we recommend using a qualified tax professional to file Form 8868.
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PRACTICE TIPS:
- When filing, bear in mind that text fields cannot exceed 35 characters and must contain only numeric, alpha or hyphen charters. Periods, slashes and so on will cause filing errors.
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At the top of the Form 990-EZ and Form 990, enter the Knights of Columbus group number (0188), tax exempt status (Section 501(c)(8)), and form of organization (Association). You may find e-filing instructions for the Form 990-N e-Postcard here: https://www.irs.gov/e-file-providers/e-file-for-charities-and-non-profits
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If the IRS website will not allow you to file a Form 990-N
The electronic filing system for the Form 990-N (e-Postcard) may reject a council’s return if: (1) the council’s EIN has been revoked for failing to file for three consecutive years; (2) the council’s EIN has recently been reinstated; (3) it is a new council; or (4) the council is not on the Supreme Council’s Group Exemption List (updated continually by the Knights of Columbus Legal Department). If you are unable to e-file, please contact the Legal Department by email at tax.ein@kofc.org. You can also contact the IRS customer service at 1-877-829-5500.
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Compliance Guide for Tax Exempt Organizations
In addition to the annual filing requirement, each council is responsible for conducting its affairs in a manner that is consistent with what is expected of tax-exempt organizations. Failure to do so may result in a council losing its tax-exempt status. In this regard, councils may wish to consult an IRS publication entitled Compliance Guide for Tax Exempt Organizations, which provides helpful guidance:
https://www.irs.gov/pub/irs-pdf/p4221nc.pdf
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Conclusion
If you have questions relating to your council’s tax reporting obligations, please contact the Knights of Columbus Legal Department by email at tax.ein@kofc.org.
Additional materials relating to United States federal tax compliance as well as many other topics affecting your council or assembly can be found on the Officers’ Desk Reference (ODR). For a username and password to the ODR, please contact Customer Service at 1-800-380-9995.
cc: Supreme Directors
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