IRS REQUIRED AMENDMENT

[renegade12@juno.com (Randy H Eiland)]

The attached post is from Richard Maxwell, Chairman of the AERC Legal
Committee.

I asked Richard to comment on the IRS requirements that our membership
must approve to allow AERC to continue to function as a 501(c)(3) Federal
Tax Exempt corporation.  I was surprised that some people questioned
these additions, since we are already a 501(c)(3) organization and this
seemed like a "no brainer", but since a few people had questions, I hope
this will help clear the air.  

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***************
From Richard:

This year the AERC was audited by the Internal Revenue Service. As a part
of that audit the IRS reviewed the Articles of Incorporation of the AERC
to
insure that they complied with the requirements of Internal Revenue Code
Section 501(c)(3) which is for charitable organizations. The AERC had
converted to a 501(c)(3) corporation some years ago. One of the benefits
of
being a 501(c)(3) corporation is that contributions are tax deductible.

The IRS noted that AERC’s Articles of Incorporation did not contain
specific
language with regard to 501(c)(3) and required that the Articles of
Incorporation be changed to add that language. This change can be
characterized as a “housekeeping” item. While it needs to be done to
avoid
losing our 501(c)(3) status, it does not in anyway alter the current
operation of the AERC.

Unfortunately, changing the AERC’s Articles of Incorporation is not
something that can be done administratively. Ramey Penticolas-Stroud
investigated whether the State of California would permit the AERC to
amend
its Articles of Incorporation by action of the Board of Directors rather
than having to spend AERC funds for a mailing to the members. However, we
were not able to fit into any exception. Fortunately, Ramey got the IRS
to
agree that we did not have to make the changes until the annual meeting
so
we avoided the expense of a separate mailing.

While this is a “housekeeping” matter, it is important that you cast your
vote in
favor of the changes to the Articles of Incorporation so that we
can be in compliance with the Internal Revenue Code. PLEASE CHECK YES ON
YOUR BALLOT AND PROMPTLY RETURN IT TO THE AERC.

Richard Maxwell
Chairman - AERC Legal Committee


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