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Associations and IRS compliance


USBC Communications
Published: May 9, 2012 | Bowl.com
Information for members in associations with revoked charters


USBC National is taking necessary steps to revoke the charter from local USBC associations for failing to file required forms with the Internal Revenue Service (IRS). These associations have lost tax-exempt status causing USBC to revoke their charters. Bowlers and proprietors in affected associations can be assured they will continue to have competition certified with USBC with all rights and privileges.

Background and Timeline
It is required for all tax-exempt organizations to submit a 990 form to the IRS in order to maintain their tax-exempt status. This is also a USBC bylaw requirement for local associations. Since 2006, USBC National has sent repeated email reminders to all associations about this mandatory requirement.

August 2010
USBC Executive Director Stu Upson sent a formal letter to all associations with a reminder about the need to file with the IRS and encouraged associations to contact USBC staff for assistance if they had not filed. In this letter, associations were warned if their tax-exempt status was revoked by the IRS, they would not be in compliance with the USBC bylaws and USBC would revoke their charter.

August 2011
The IRS published a list indicating the revocation of tax-exempt status of more than 200 USBC local associations for failing to file 990 forms with the IRS for the past three years.

October 2011
USBC sent a formal letter to the Presidents and Managers of the non-compliant associations. The letter informed the association of the action by the IRS and offered the associations an opportunity to request assistance. Several local associations contacted USBC for assistance and were eventually removed from the list as result.

December 2011
USBC sent another formal letter to members of the board of directors in the remaining non-compliant or non-responsive associations. This letter included the following information:

* The IRS has revoked their association's tax-exempt status.
* The Association Manager and President have been informed previously
* Their options included:

         1) Requesting retroactive reinstatement of the tax-exempt status from the IRS
         2) Proving their 990 forms were actually filed
         3) Request a hearing
         4) Having counsel review and respond in writing

The letter informed the board members they had 30 days to exercise one of the above options or the association charter would be revoked by USBC National. The majority of the associations receiving these letters finally took corrective measures.

2012
USBC informed the remaining non-compliant or non-responsive associations that their local association charter had been revoked. The USBC Legal and Legislative Committee met to review any appeals. Members and centers in revoked associations have typically been moved to a nearby association.

Local Association Board Responsibility
Local USBC association board members should be aware they have the responsibility to confirm IRS forms are properly filed.  It is not acceptable to presume someone else has filed on behalf of the organization. The USBC Association Policy Manual states:

"It is the responsibility of the entire board to ensure all legal documents are filed and all taxes are paid as legally required. This will include Form 990, 990-EZ, 990-N, 999-T, 1099, W2, 941 and any others as applicable."

Once an association board has failed in this responsibility and the association lost tax-exempt status, the association no longer qualifies to be part of USBC according to the requirement in USBC Local bylaws - Article II, Section A:

"The association is organized as a nonprofit corporation and operates consistent with the requirements of an organization classified as tax exempt under Section 501(c)(3) of the Internal Revenue Code (IRC)."

Anyone with questions can contact the USBC Rules team at rules@bowl.com

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