4-H clubs and scout units: do you file a Form 990-N?

Three ways a club or unit can be set up

Youth clubs that belong to a national or state program are organized in different ways, sometimes even within one program. For the IRS annual return, it comes down to three cases:

1. Its own EIN, covered by a group exemption. The club is a separate organization, and its tax-exempt status comes from a group exemption held by a central organization (for example a state program or council). It files its own return every year, unless case 2 applies.
2. Included in a group return. The central organization files one Form 990 on behalf of some or all of its subordinates. A club included on that group return does not file separately; the IRS says the group return satisfies its reporting requirement.
3. Part of another organization. The unit has no EIN or exemption of its own. Its money belongs to, and is reported by, the organization it is part of, such as a chartered organization, a council, or an extension program. It files nothing itself.

A club with its own EIN and its own IRS exemption letter, rather than a group exemption, files its own return like any other nonprofit.

What a group exemption does and does not do

A group exemption is one IRS ruling issued to a central organization. It covers the subordinates the central organization lists with the IRS, and it has the same effect as an individual exemption letter. Each subordinate needs its own EIN, according to IRS Publication 557.

What it does not do is file anything. IRS Publication 4573 says "A group exemption letter does not change the filing requirements for exempt organizations." The central organization and its subordinates file their own returns unless they meet an exception, and a central organization may file a group return for some or all of its subordinates.

The central organization decides who is covered. Publication 4573 says the central organization, not the IRS, determines which organizations are included, and the way to verify is the central organization's official subordinate list or the central organization itself.

How to check your club

1. Ask the central organization. For 4-H, that is usually your county extension office or state 4-H program; for a scout unit, your local council. Ask three things: does our club have its own EIN, are we on your group exemption list, and do you include us in a group return?
2. Look up the EIN. Search the IRS Tax Exempt Organization Search or the 990.tax nonprofit lookup, which shows a group exemption number when IRS records list one. Publication 4573 notes that most subordinates are not listed separately in Tax Exempt Organization Search, so a missing listing is not by itself a problem.
3. Check the revocation list. Tax Exempt Organization Search also lists organizations whose exemption was automatically revoked for not filing three years in a row.

If your club files its own return

• Gross receipts normally $50,000 or less: Form 990-N, the e-Postcard.
• Gross receipts under $200,000 and total assets under $500,000 at year end: Form 990-EZ (or the full Form 990).

Gross receipts are the total amounts received from all sources, without subtracting costs: dues, donations, and the full amount taken in at fundraisers such as bake sales, car washes and auctions. The return is due on the 15th day of the 5th month after the tax year ends, which is May 15 for a calendar year. There is no IRS penalty for a late 990-N, but three consecutive years without a filing revoke the exemption automatically. See filing a past-due 990-N.