$$Money, Money Money$$

By Ron Levesque, Treasurer

IRS Woes Befall AFT 6157-R

On March 13, 2020, I received a startling letter from the IRS informing me that our tax-exempt status, (501(c)(5), had been automatically revoked by law, effective November 15, 2019. Our past had caught up with us, and just as the pandemic was bursting onto the scene. The IRS revoked our status because, they claimed, we had not reported on our income in three consecutive years. The fact was that we had been filing faithfully each year. We had not received any particular notice or warning from the IRS. Our accountant was aware that our recent filings had not been accepted for some reason, and he thought that we had a third year before losing our status. But he miscounted and suddenly we had lost our exemption.

We had several ways to remedy this and the AFT 6157-R Executive Committee decided to apply for reinstatement since we wanted to maintain our tax-exemption. The process was costly, $600, and time-consuming. We had to file three years of tax reports prior to 2020, fill out a lengthy application, submit our bylaws, financial records, and a newsletter sample, all to verify our existence, organization, and activities.

In the process, we learned that our bylaws had gone unchanged since their adoption in 2007! Those bylaws no longer reflected the affiliation we now have with our main union, AFT 6157. In 2007, our chapter was fully funded by AFT 6157, and all our decisions had to receive their approval. Our accountant advised us to revise the bylaws to show our greater independence. Otherwise, he argued, why would the IRS grant us individual tax-exempt status if we were still fully dependent on AFT 6157? We approved our updated bylaws, including our formal new name, AFT 6157-R, in May 2020.

It turns out that in 2014, the old union, Faculty Association, changed its own bylaws and its name to AFT 6157, but the Retiree Chapter did not. Even to this day, older retirees still call our union the FA. At the same time, the Retiree Chapter took a step towards independence and self-funding by securing its own EIN, Employer Identification Number, from the IRS in 2014. From this point on, the Retiree Chapter filed its own tax reports to both the state and the federal government. But we remained unknown to the national office of AFT because no notification was given to them by either our main union or the retiree chapter. Once the IRS updated its computer system in 2015, we fell into the cracks and had our federal tax reports rejected since our tax-exempt status was not in place correctly with the AFT. (We never did have trouble with our State tax reports because our accountant had notified CFT, California Federation of Teachers, of our existence.)

In the end, on August 19, 2020 the IRS approved our application and our tax-exempt status was reinstated effective back to November 15, 2019. We finally no longer have to rely on our affiliation with a parent organization, AFT 6157, for recognition of our tax exemption. It took too long after 2014, but all is now in order. In some ways, this was an ideal project to undertake during quarantining and forced isolation from a deadly virus. But neither was much fun!