Re: IRS-Articles of Incorporation Change

[K S Swigart <katswig@deltanet.com>]

On Mon, 12 Oct 1998, Randy H Eiland wrote:

> K.S. Swigart and Teddy have presented some interesting arguments against
> the IRS requirement that AERC add two paragraphs to our Article SECOND of
> the Articles of Incorporation.  However,  it seems to be argument for the
> sake of argument with no valid reasoning.  I still don't understand why
> they are so adamantly against AERC RETAINING its 501 (c)(3) Federal Tax
> Exempt Status, nor can I think of any beneficial reason that AERC would
> want to lose its Tax Exempt Status.

Lest people misunderstand me.  I am not adamantly against the AERC
retaining its 501(c)(3) statuse.

What I asked for was additional information with regards to the proposed
change and the answers I got were:

"Because the IRS says we have to in order to remain tax exempt."

WHich is not true.  The AERC doesn't even have to remain 501(c)(3) to
remain tax exempt.

"Because the IRS says we have to in order to remain 501(c)(3)."

Which may not be true (more on that later*).

and

"We have to remain 501(c)(3) in order to get corporate sponsorships for
our awards program (or whatever)."

Which is also not true.

So, the only justifications provided are either a) not true or b) may not
be true.  This does not give me a warm fuzzy feeling.  It also does not
give me a warm fuzzy feeling that the few responses that I did get from
the Board of Directors demonstrated that they didn't even know that this
was a change to the Articles of Incorporation and not the By-laws.

All that said, the AERC clearly has to do something (since they received a
letter from the IRS, and such letters are best not completely ignored).

Since this has to go out to the entire membership for vote, let's make
sure that the "something" that we do is the right thing.

kat
Orange County, Calif.

* I DID take the day off from paying work today in order to immerse myself
in the Federal Tax Code.  I made copies of what I consider to be the
relevant sections of the code (and the associated IRS publications) and
will report back on what _I_ think that means in relation to a) the letter
(portions of which have been quoted here) from the IRS and b) the AERC's
Articles of Incorporation.  However, I can't do that until I get a copy of
the AERC Articles of Incorporation, which I had originally planned to call
the AERC office for today, but spent the entire day away from a phone...so
I will call them tomorrow.

Hopefully, then, AERC members can make a more informed decision. 
Although, I still would like the AERC to consult somebody who specializes
in this field, 'cuz I ain't no tax lawyer either. I train horses for a
living! :) (I also happen to have studied business and business law at
Columbia University and have worked as a financial/management/technology
consultant for a variety of organizations as well as for a Big-6
Accounting firm).

ANd when I say "in this field" I don't just mean tax law, I mean
specifically tax exempt corporations.  

Ever since I had to re-import my car from Europe and get it through
customs at the Port of Long Beach I have come to appreciate the value of
hiring specialized experts to take care of federal bureaucracies for me. 
When I tried to deal with the customs officials myself I had to make
multiple calls to the dock, the customs agents (one of whom hung up on
me), the EPA and (believe it or not) the Department of Defense!  After I
got done with all these phone calls and found out that I was going to need
to fill out 18 different forms AND post a $25,000 bond I called a customs
agent.  The customs agent told met to send her $200 and she would take
care of everything for me.  Sure enough she did...with nothing more than
her signature.  I had my car by the end of the day.