Student Organization Tax Exempt Policy
Requirements to be recognized as a student organization by the College of Agricultural and Life Sciences:
- Recognition by ASUI and the associate dean for Academic Programs
- Bylaws on file with Academic Programs office
- Officer roster and contact information submitted following each election
- Non-profit operation with less than $5,000 in gross revenue or tax-exempt status
Student organizations in the College of Agricultural and Life Sciences are expected to conduct all operations solely on a not-for-profit basis. Being affiliated with the University of Idaho (UI) through ASUI recognition or other means however, does not confer the tax-exempt status of UI upon student organizations. Student organizations therefore, are required to obtain tax-exempt status independently of UI and obey respective state and federal taxation laws and filing requirements.
Additionally, student organization officers and advisors should be aware of the potential legal and financial ramifications of being associated with bank accounts managed in an unlawful manner. Accountability regarding the usage of student organization funds and how such funds are accessed is one step to ensure your name isn’t attached to a bank account that is being used unlawfully.
Exemption requirements for 501(c)(3) tax-exempt organizations are listed at irs.gov:
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.
The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct.
“Exempt purposes” are defined on irs.gov as:
The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.
The IRS also publishes “Applying for 501(c)(3) Tax-Exempt Status,” a guide that is available as a hard copy at the Academic Programs office or online at the following link: https://www.irs.gov/pub/irs-pdf/p4220.pdf.
- 1023-EZ form instructions: https://www.irs.gov/pub/irs-pdf/i1023ez.pdf.
- Tax-Exempt status for your organization: https://www.irs.gov/pub/irs-pdf/p557.pdf.
Student organizations will likely need an EIN (Employer Identification Number) for different financial purposes, including applying for funding from ASUI. This can be completed online at the following link: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online.