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Nonprofit Status Update

Dear CEDA members,

As many of you know, we have been working with the IRS for a while now trying to maintain our tax-exempt status. For those of you who were not present at the meetings when this situation was discussed, I have included at the end of this letter a general summary of events to help you understand the situation. Additionally, there is a major Action Item we need to accomplish as soon as possible – this is outlined below.

Action Item: In order to qualify for tax exemption, we need to modify the constitution. I have drafted the necessary Articles that need to be added to the constitution. They are attached. They contain the standard wording required by the IRS. In fact, if you google any phrase from these amendments, you will find it on the internet for other tax-exempt groups. Basically the amendments clarify that we meet the non-profit definition and that we have a procedure for conflict of interest. These amendments make no changes from our normal practices.

Jeff will begin the alternative amendment process very soon. I believe that process requires a large percentage of the membership to vote yes on the amendment. I urge you to participate in this process. If you have any questions, please let us know.

Background: CEDA, as a nonprofit, is required to file annual tax returns. The 2006 and 2008 returns were never filed. In 2009 Kelly McDonald and I began the transfer of Treasurer responsibilities. The missing returns and the 2009 returns had to be filed before the transfer of Treasurer responsibilities could be completed. Kelly was able to submit all of the missing returns by early 2011; and at that point I filed the 2010 returns. The 2011 and the 2012 (year ending May 31, 2012) were filed on time.

On May 16, 2011, I received a letter from the IRS that said:

“We have closed your collection case. Based on our records, there are no taxes or tax returns currently due on this case for the tax types and periods listed below. We will reopen your case if warranted and will contact you if we do. You don’t need to take any action at this time.”

In June of 2011, the IRS sent a letter to Kelly at ASU – apparently they never changed the address or treasurer information. The letter found its way to me and indicated that CEDA had lost its nonprofit status because the 2006 returns were filed more than three years late. I investigated the matter and found that we could re-apply for nonprofit status. The process is quite involved, tedious, and confusing, but the accountant who does our taxes has been handling this matter for us. It seems that the last thing needed is a constitution that meets the IRS approval – thus the amendment process in which we need your participation.

Thank you for reading and thank you for voting.

M.L. Sandoz, Treasurer
Cross Examination Debate Association

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