Non-Profit Corp without Exempt Status

501(c)(3) or (4), but has apparently never requested IRS recognition of such exempt status. The squad enjoys a relationship with the city which it serves wherein the city provides the building which houses the ambulances, and pays all insurance and fuel costs of the squad. The squad bills and collects fees from Medicare, Medicaid, insurance carriers, and individuals for emergency medical care and ambulance transport services provided. From income received, the squad purchases vehicles, equipment, and supplies, pays utilities, license fees, and other necessary expenses, and provides nominal stipends to its volunteer member EMTs and ambulance drivers. The squad properly withholds payroll taxes and pays matching FICA and Medicare tax on members' stipends. Absent the city's financial contributions, the squad would probably operate at a loss and go out of business. Operating rent-free and without fuel and insurance costs, the squad currently maintains a mid five figure positive bank balance. According to the squad's articles of incorporation, upon dissolution of the corporation, all assets transfer to the city.

The best that I can tell, the squad (corporation) has never filed an income tax return in its 20+ years of operation. Long-time members say that any required income reporting is handled by the city. City clerk denies knowledge of any squad income tax returns. According to IRS guidelines for application for recognition of exemption

, "... organizations will not be treated as described in section 501(c)(3) unless they notify the IRS by applying for recognition of section 501(c)(3) status." This implies to me that without 501(c)(3) exemption and Form 990 filing, the squad (corporation) should be filing Form 1120. Before accepting a director position, I'd like to determine the squad's tax filing and paying requirements, and help squad members understand and comply with with those requirements. I have a meeting scheduled with the city's CPA next week. In the interim, I'd appreciate any input and guidance that tax pros here can provide. ================ OK. Who completes the payroll tax returns for the activity? If the city does, then this is a unit of the city and therefore income tax is not the service's problem.

The corporation prepares, files, and pays the 941 in its own name and EIN. I think, when all of the facts are known, I'm going to find that the corporation is considered an instrumentality of the city, thus making it income tax exempt.

Perhaps. However, that does not necessarily give the board members government immunity. So, I would verify that the organization has proper liability insurance coverage for board members before accepting a position. JMO.