What does the IRS actually require from a small chapter that collects dues every year?

The IRS requires an annual information return from your chapter every single year, even in a year when you raised nothing, spent nothing and held two meetings. Which return depends almost entirely on gross receipts. Under $50,000 normally means the Form 990-N electronic postcard, which takes about ten minutes. Above that you move to the 990-EZ, and past $200,000 in receipts or $500,000 in assets you file the full Form 990.

The consequence of skipping it is not a fine. It is automatic revocation of exempt status after three consecutive missed years, applied by operation of law with no warning letter required. Chapters lose exemption this way constantly, usually because a treasurer resigned in March and nobody knew the filing existed.

Here is the calendar, the thresholds, the treatment of dues, and the record set that makes next year's filing a one-hour job instead of a weekend.

Which form your gross receipts put you in

Gross receipts means everything that came in before subtracting any expenses. Not net. Not what is left in the bank. If your gala grossed $18,000 and cost $16,000, the gross receipts figure is $18,000, not $2,000. Chapters routinely underestimate their bracket by netting events.

Gross receipts	Total assets	Form
Normally $50,000 or less	Any	990-N, or 990-EZ or 990 voluntarily
Under $200,000	Under $500,000	990-EZ or 990
$200,000 or more	Or $500,000 or more	Form 990

"Normally $50,000 or less" is a defined test, not a judgment call. For an organization that has existed more than three years, it means average annual gross receipts over the immediately preceding three tax years, including the current one, are $50,000 or less. So a chapter at $30,000, $35,000 and $90,000 averages $51,667 and does not qualify for the postcard that year, even though two of the three years were small.

Private foundations file Form 990-PF regardless of size, and certain organizations, including most churches, are excepted from filing entirely. Neither is likely to describe a dues-collecting chapter.

Keep reading: Why do so many chapters lose the treasurer's records the moment she hands off the role?

The 990-N electronic postcard and what it asks

The 990-N is submitted electronically through the IRS site. There is no paper version and no fee. It asks for eight items, all of which you already have.

• Employer Identification Number
• Tax year covered
• Legal name and mailing address
• Any other names the chapter uses
• Name and address of a principal officer
• Website address, if you have one
• Confirmation that gross receipts are normally $50,000 or less
• A statement if the organization has terminated

Two practical notes. The submission requires an IRS account login, and creating that account involves identity verification, so do not start it at 9pm on the due date. And the principal officer listed should be a current officer with an address that will still receive mail in twelve months, which for many chapters means the PO box rather than a president's apartment.

When to file the EZ even though you qualify for the postcard

A chapter applying for grants, opening a line of credit, or negotiating with a large venue sometimes benefits from having a real return on file. The 990-N shows the public almost nothing. A 990-EZ shows revenue, expenses and net assets. Filing up is allowed, and occasionally worth the extra work.

Due dates tied to your fiscal year end

The return is due by the fifteenth day of the fifth month after the close of your tax year. Work out which tax year you actually adopted, because chapters that run a July to June program year often assume that is their fiscal year when the IRS record says December.

Fiscal year ends	Return due	With extension
December 31	May 15	November 15
June 30	November 15	May 15
September 30	February 15	August 15

Form 8868 gives an automatic six month extension for the 990 and 990-EZ. It does not apply to the 990-N, but the 990-N has no late filing penalty either, so a late postcard is simply filed late. What it does do is start the three year clock.

Set the reminder on the officer transition calendar, not on a personal phone. The single most common failure pattern is a treasurer who filed faithfully for four years, handed over in June, and never mentioned it because to her it was routine.

Automatic revocation after three missed years and how reinstatement works

Miss the required annual return for three consecutive years and exemption is revoked as of the due date of the third missed filing. The organization then appears on the IRS Automatic Revocation of Exemption List, which is public and searchable, and which sponsors and grantmakers do check.

Revocation means the chapter is treated as a taxable entity from the revocation date forward. Donations are no longer deductible. Income, including dues, may become taxable.

Reinstatement requires a new exemption application, Form 1023, 1023-EZ or 1024, with the user fee, and the letters "Revoked" written across the top or the appropriate box checked. There are several reinstatement paths described in IRS guidance, with different rules about whether exemption is restored retroactively to the revocation date and whether reasonable cause must be shown. Small organizations that were eligible for the 990-N have the most forgiving route, provided they act within fifteen months of the later of the revocation letter date or the posting on the IRS list. Past that window the requirements get heavier.

The practical lesson is speed. A chapter that notices revocation in month four is in a very different position from one that notices in year three.

Keep reading: How did one alumnae chapter go from forty percent renewals to eighty in two years?

Are dues taxable income or exempt function revenue

For an exempt chapter, member dues paid in exchange for the ordinary rights of membership are exempt function revenue. They are reported on the return, and they are not taxed. That holds across the common chapter classifications.

Where it gets interesting is the deductibility question on the member's side, which is different from the chapter's tax question. Dues paid to a charitable organization are deductible only to the extent they exceed the value of benefits the member receives. If your $80 dues include a directory, discounted event pricing and a member appreciation dinner worth $30, the deductible portion is $50, and members will ask you for that figure at tax time. Decide it once, put it in the renewal notice, and stop answering it individually.

Members of a business league face a separate rule: the portion of dues attributable to lobbying is not deductible as a business expense, and the organization must either notify members of the nondeductible percentage or pay a proxy tax. If your chapter takes positions with a legislature, this applies to you.

When raffles, galas and sponsorships create UBIT questions

Unrelated business income tax applies to income from a trade or business, regularly carried on, not substantially related to the exempt purpose. All three prongs must hold, which is why most chapter fundraising escapes it.

• Annual gala. Once a year is not regularly carried on. Generally fine.
• Volunteer-run events. There is a statutory exception where substantially all the work is done by unpaid volunteers, which describes most chapter activity.
• Qualified sponsorship payments. A sponsor's name, logo and contact information in your program is an acknowledgment, not advertising. Comparative claims, price information or an endorsement turn it into advertising income.
• Selling ad space in a directory or newsletter. This is the classic chapter UBIT item, especially if it runs all year and is sold by anyone paid.
• Raffles. Rarely a UBIT problem, but they carry state gaming licensure requirements and federal withholding and Form W-2G reporting duties on large prizes.

An organization with $1,000 or more of gross unrelated business income files Form 990-T in addition to its regular return. Below that, no 990-T.

See how ChapterDues handles this for women's membership chapters and alumnae groups

State charitable registration on top of the federal filing

Federal exemption is not a permit to solicit. Most states require charitable organizations that solicit contributions from their residents to register with a state office, often the attorney general or secretary of state, and to renew annually. Some states exempt organizations below a receipts threshold or those soliciting only from their own members, which is why many small chapters are legitimately exempt from registration.

Three triggers to watch. A public fundraiser open to nonmembers. A donation button on a public website. Any mailed appeal that crosses state lines, which matters for alumnae chapters with members scattered across a region.

Renewals commonly require a copy of the federal return, which is a second reason to keep the filing current even when the postcard alone would satisfy the IRS.

Records to keep so next year's filing takes an hour

The filing is easy. Reconstructing the year is what takes the weekend. Keep these, current, in one place a successor can open.

1. EIN determination letter and, if applicable, the group exemption ruling number from national
2. Articles, bylaws and every amendment
3. A dues register: member, tier, amount, date paid, method, refunds and waivers
4. Bank statements, reconciled monthly, with the reconciliation saved
5. Event files: gross receipts and gross expenses per event, kept separately, never netted
6. Sponsorship agreements showing exactly what the sponsor received
7. Board minutes recording every dues change, budget approval and signer change
8. Prior year returns and the confirmation receipt for each filing

Keep the calendar with the records. Fiscal year end, return due date, extension date, state registration renewal, and the national roster count date all belong on one page.

Making the filing routine

Almost every compliance failure at chapter level traces back to the same root: the numbers live in one officer's spreadsheet and the deadlines live in her head. Gross receipts get netted by accident. Waived dues never make the register. The postcard gets filed for four years and then does not.

ChapterDues keeps the dues register, the event RSVPs and the payment history in one place all year, so the gross receipts figure you need in May is a report rather than an archaeology project, and the treasurer handover report gives the incoming officer the balances, the open items and the filing calendar on her first day. Confirm your bracket with the tables above, put the due date on the officer transition checklist, and let the record build itself.