This information is not intended to give legal or tax advice. Consult your professional advisors to determine the specific rules applicable to you or contact the IRS directly. (www.irs.gov or 1-800-829-5500)
The following is the text of a memorandum issued by Rotary International. If you would like to have a downloadable version of this document that includes appropriate Internet links for specific information in this document, click on the download icon on the left.
What is an Employer Identification Number (EIN) and does my club need to apply for one?
An Employer Identification Number (EIN) is a nine-digit number used by the IRS to identify an entity. All Rotary clubs in the US and US territories (American Samoa, Guam, Northern Mariannas, Puerto Rico, US Virgin Islands) need to apply for an EIN when they charter. To find out more, visit How to Apply for an EIN and Instructions for Form SS-4 at www.irs.gov. Please note that RI’s Group Exemption Number (GEN) 0573 must be included on the form in order for your club to be tax-exempt under RI’s Group Exemption.
What must my club do when we receive our EIN from the IRS?
Your club should send a copy of the notice from the IRS confirming your EIN to your Club and District Support Representative (CDS). It is also necessary to include a positive confirmation that your club wishes to be included in RI’s 501(c)(4) Group Exemption ruling.
Why is it important for my club to send its EIN to RI?
RI enters your club’s EIN into its database and annually confirms with the IRS all clubs included under RI’s 501(c)(4) Group Exemption ruling. There are many forms of tax IDs (both state and federal) that a club may have in its records. A copy of the official IRS letter will help ensure RI reports the correct nine-digit number to the IRS.
What is the official naming convention for Rotary clubs according to the IRS?
RI will report your club’s name as the Rotary Club of Community, State. To confirm the club name registered with the IRS, contact them directly at 877-829-5500.
Can my club use RI’s EIN when applying for a bank account or filing?
No. Each EIN is specifically assigned to a single entity or club. Your club must use its own EIN when applying for a bank account or filing its annual information form.
What do the terms 501(c)(3) and 501(c)(4) mean?
These are federal tax classifications for organizations that meet the requirements of Internal Revenue Code section 501(a). Charitable organizations are exempt under section 501(c)(3) and social welfare organizations under 501(c)(4) of the Internal Revenue Code. Under RI’s Group Exemption ruling, Rotary, Rotaract and Interact clubs are entitled to 501(c)(4) tax-exempt status. For more information about these tax classifications, please visit Life Cycle of an Exempt Organization at www.irs.gov.
Are contributions to my club considered charitable contributions for individuals?
Contributions to clubs are generally not tax deductible as charitable contributions. Contributions to any club's charitable fund that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code may be tax-deductible as charitable contributions. Membership dues may be deductible for some Rotarians as business expenses.
Can my club or club foundation use The Rotary Foundation’s EIN to receive charitable contributions?
No. Each EIN is assigned to a specific entity. The club or club foundation itself must meet the requirements of the Internal Revenue Code in order to receive charitable contributions.
Can my club or club foundation obtain 501(c)(3) tax-exempt status under The Rotary Foundation?
No. The Rotary Foundation (TRF) does not currently have a group exemption under which clubs or club foundations can obtain 501(c)(3) tax-exempt status. Clubs must work directly with the IRS to apply for this exemption on their own.
TRF operates a Donor Advised Fund (DAF) that provides similar benefits to a club foundation. Any club interested in forming a foundation or having trouble managing an existing foundation should review the opportunities available through TRF DAF at www.rotary.org/plannedgiving.
My club obtained 501(c)(3) tax-exempt status. Do we need to report this to RI?
Yes. Your club should submit to your CDS representative a copy of the IRS notice confirming its tax-exempt status. RI will then remove your club and EIN from our 501(c)(4) Group Exemption ruling.
Does my club need to file an annual information form with the IRS?
Yes. While Rotary clubs and districts are exempt from paying federal income tax, the law requires all Rotary clubs and districts to file an annual information return (Form 990, 990-EZ) or submit an annual electronic notice (990-N). The version a club files is dependent upon its gross receipts for the year. For more information about this requirement and to find out which form to file, see Which forms do exempt organizations file? at www.irs.gov.
What is the deadline to file an annual information form to the IRS?
These forms are due every year by the 15th day of the 5th month after the close of your tax year. For clubs following RI’s tax year ending on 30 June, the deadline to file is 15 November.
Where can my club find more information about Form 990-N (e-Postcard)?
Refer to Exempt Organizations Annual Reporting Requirements - Annual Electronic Notice (Form 990-N): Frequently Asked Questions and Answers at www.irs.gov.
Should my club include the receipt of Global or District Grants on our Form with the IRS?
If you are required to file an annual information return (Form 990, 990-EZ), generally you should report all receipts and disbursements on the form regardless of where those receipts originated.
My club received notice from the IRS that our tax-exempt status was automatically revoked for failure to file for three consecutive years. What does this mean and what do we do?
According to IRS regulations, an organization whose tax-exempt status has been automatically revoked must apply to have its tax-exempt status reinstated, even if it was not originally required to file an application for exemption. To check your club’s tax-exempt status, visit Exempt Organizations Select Check at www.irs.gov. For more information about the consequences of revocation and how to apply for reinstatement, please see Automatic Exemption Revocation for Non-Filing: Frequently Asked Questions at www.irs.gov.
For any further questions, please contact the IRS directly at 877-829-5500.