Treasurer’s Guide for a New RLC Chapter
These simple guidelines should help you do everything you need to do to deal with the financial aspects of starting a Republican Liberty Caucus state or regional chapter and answer most common questions.
Opening a Bank Account
Once you start a chapter you need to open a bank account to store any funds your chapter acquires from dues or other sources. In order to open a bank account you will need to prove that you represent the organization and that it has a legal existence.
To do this you should only need the following.
A copy of the minutes from a board meeting or chartering meeting recognizing you as Treasurer, authorizing you to open a bank account and naming the officers who will be allowed to sign on the account. We recommend 2 or 3.
An Employer Identification Number from the IRS. To apply for an EIN just go to http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN and follow the link to do it online. It’s very quick and simple and does not obligate you to any particular tax responsibilities.
An official letter from the IRS recognizing our status as a non-profit 527 organization. The official IRS letter identifying us as a 527 Political Membership Organization can be downloaded from http://www.rlc.org/images/527letter.pdf. All chapters are automatically included under our existing filing.
A “Doing Business As” certificate from your local County Clerk. This usually only costs a few dollars and is a way to register the official name of your organization.
Your bank will make you fill out a form with additional questions which should be easy to answer like who your officers are, who can sign checks, what your address is, etc. If the bank wants more information or other forms beyond what is listed here we recommend trying another bank. Generally small, local banks and credit unions are much less obsessed with unnecessary red tape. Do not listen to anyone who tells you that you need to incorporate or form a LLC or any other similar business entity.
527 Organization Reporting Requirements
The RLC is a multiple 527 tax-exempt political membership organization. The way that 527s work every chapter is considered part of the parent organization and is registered under their filing of form 8871 with the IRS. 527s are non-profits but they are different from those you may be more familiar with. Donations are not tax deductible but the organization is tax exempt and “created primarily to influence the selection, nomination, election, appointment, or defeat of candidates to federal, state or local public office.”
Unless you have gross income in excess of $50,000 a year you do not have to file any form with the IRS. If you have $50,000 or more in income then you have to file an IRS Form 990. The IRS documentation tries to make it sound like everyone needs to file a Form 990, but if you read it carefully there is no actual requirement below that income threshold and we recommend against filing the form unnecessarily. If you do go over $50,000 in income in one year you are still not required to pay any taxes because a 527 is tax-exempt, but you should file the form.
Although PACs are also 527s, your RLC chapter is not a PAC and is under a different set of guidelines which can be found here. This FAQ on 527s may be helpful http://www.publicintegrity.org/2005/11/21/5541/527s-frequently-asked-questions#5
Non-PAC 527s like the RLC are also not required to file any information with the Federal Election Commission or your state equivalent agency under normal circumstances.
You may also find it advisable to file for a Tax ID number with your state. This may not be essential in most states because you are a non-profit, but if you are selling merchandise beyond just memberships, it is probably advisable, even if you file no taxable sales every year. It also allows you to easily purchase materials for use by the chapter without paying taxes on them. This ought to be free as well.
If you use the national RLC website to collect dues payments, make sure that new members make clear that they are registering through the state chapter. That way your full share of the dues will be remitted to you quarterly. If you collect dues yourself, make sure that $15 for every member is sent on to the national organization if you are a state chapter. If you are a regional chapter follow the guidelines for your state on submitting dues to your state board.
Fundraising and Spending
There are no limits on how much can be contributed to your chapter by any individual or in total. There are no restrictions on who can contribute. There is no requirement that you report who contributed or how much they gave. You cannot donate money directly to a campaign or spend money in coordination with a campaign, but you can independently promote your endorsements or your chosen candidates or issues without any spending limits.
The RLC already has a federal-level PAC to support candidates for Congress, so there is no need for any state to create a federal PAC. Your state chapter will play the lead role in suggesting federal candidates from your state for endorsement and potential PAC support from the national organization.
Some state chapters may wish to create state level PACs to donate directly to the campaigns of local or state-wide candidates. Restrictions on state level PACs vary greatly from state to state. Check with your Secretary of State’s office or state Ethics Commission or equivalent organization which regulates PACs on how a state PAC can be set up and operate legally in your state.