[17527] in APO-L
Re: APO Reserves
daemon@ATHENA.MIT.EDU (Shelly Mccormick-Lane)
Tue Nov 11 18:34:11 1997
Date: Tue, 11 Nov 1997 18:24:34 -0500
Reply-To: SMLn@AOL.COM
From: Shelly Mccormick-Lane <SMLn@AOL.COM>
To: Multiple recipients of list APO-L <APO-L@VM.CC.PURDUE.EDU>
<< Remember, as a 501(c)(3) tax exempt
organization we technically must maintain a zero balance in the checking
account (we cannot make a profit, legally)... although fortunately the IRS
doesn't keep very close tabs on us, which is why we have been able to keep
the savings account where it has been for years. W >>
Before this frightens chapters into emptying their checking and savings
accounts, let me stress that there is __nothing__ in the Internal Revenue
Code that says that a 501c3 must maintain a zero-balance checking account -
there are many multi-million dollar 501c3's with large staffs, and to expect
them to maintain zero money in a bank account would be both unreasonable and
not feasible. Additionally, a 501c3 _is_ allowed to make a profit - it just
cannot be the main purpose of the organization. There are educational
institutions that have 5013c status, and as a former direcotr of one, I
promise you we tried our best to amke a profit on every education program we
ran.
Additionally, the IRS keeps closer tabs on you than you might think -
chapters may be "small potatotes" when compared to big businesses, but if you
are required to file and you don't, they will find out. Trust me.
Shelly McCormick-Lane
Section 84 Chair -- Maryland/DC
Tax Accountant - working for a firm specializing in IRS representation
