1. What happens if, through no fault of our own, we are unable to meet all of the dues transmittal deadlines? Are we still charged a late payment penalty?
A penalty will not be charged if you submit a request for penalty waiver prior to the first due date (November 1). The reason for the request must be clearly beyond your control; most commonly, this involves a conflict with the school district’s withholding schedule. The request should include the name of the local, the name and title of the person making the request, the time period involved, and a complete and concise description of the reason for the request.
The request should be sent to Randy Welch, Director of Business Services at IEA Headquarters in Springfield. It may be sent by regular mail or by e-mail to mailto: randy.welch@ieanea.org. If sent by e-mail, a confirmation of approval will be returned to the sender.
2. I’ve heard that my local can receive a rebate of the IPACE funds contributed by our members. How does this work?
A Level I Standard Rebate of $4.00 per contributing member is available each year. This rebate must be requested during the current IPACE year, which runs from July 1 to June 30. Rebates cannot be provided for prior years, e.g. on June 30, 2005 you can only request a rebate for the 2004-2005 year, and on July 1, 2005 you can only request a rebate for the 2005-2006 year.
Rebate requests must be made in writing or by e-mail. Written requests can be sent to the Government Relations Department at IEA Headquarters in Springfield.
In addition, you may be eligible for a Level II Special Rebate of up to $6.00 per contributing member ($10.00 total) if you have special circumstances that will require more funding. The reason for such a request should be fully documented in your written rebate request.
Finally, under unusual circumstances a Level III Priority Project rebate of larger than $10.00 may be available. This rebate requires a budget and the approval of the IPACE executive committee. Contact Government Relations for further details.
It is important that all political action funds be fully accounted for and spent for the proper purposes. They should be kept in a separate, noninterest-bearing checking account and complete records should be kept as to how they are spent. See the IPACE Do's and Don'ts for further information.
3. Our local is thinking about obtaining a credit card for use by our officers. What guidelines should we follow on this?
All other avenues and alternatives should be explored before the decision is made to obtain a local association credit card. Use of a credit card negates some of the internal controls that are discussed in the IEA Local Treasurer’s Handbook, e.g. the "two signature" recommendation. Unfortunately, we have seen cases where a person has used a local or region credit card inappropriately and has not been able to pay the funds back.
For purchases that must be made by credit card, we recommend that an officer of the local make the purchase and then get reimbursement from the local. Normally, this can be done so that the officer is reimbursed before he/she has to pay the credit card bill. Nowadays, most officers seem to prefer this approach since they get rebates, airline mileage, etc. through use of their personal credit cards.
If there is no alternative to a local obtaining a credit card, we recommend that the credit limit be set as low as possible so that losses due to improper usage are minimized. If the card’s purpose can be served by obtaining it from a single vendor, such as Lowe’s, this is preferable to obtaining a general-purpose card such as MasterCard or Visa.
4. Is it permissible for our local to generate interest income through money market accounts, certificates of deposit, etc.?
You should not generate investment income on your political action funds, which should be kept separate from your local’s other deposits (see Question #2 above). Otherwise, there is nothing wrong with investing your spare funds so that interest income is generated. This provides extra funds for your local, which can be used for any legitimate purpose for which you would normally spend your local dues income. Of course, you should be prudent in your selection of investments for your spare funds.
5. I have heard that the IEA charges $1,500 to perform an audit of a local association. Is this true?
There is normally not a charge for auditing a local, even a large one. If there were specific circumstances that required out-of-pocket costs (other than normal travel expenses), the local might be expected to pay these, but in most cases the audit itself would be at no charge.
Audits are performed by the Director of Business Services and can be scheduled by calling the main IEA telephone number (800/252-8076) or by sending an e-mail to mailto: randy.welch@ieanea.org.
The scheduling of audits is dependent on time availability, so requests should be made well ahead of time if possible.
6. How are IEA membership cards distributed?
Normally, cards are printed in late August and are mailed to local Presidents in early September. 2004 was an exception to this schedule, due to some startup issues with the new Access card being combined with the membership card. The local Presidents are then expected to promptly distribute the cards to their members. The cards are printed in alpha order and sorted by building ( if this information has been provided by the local).
To be sure that our members receive their membership cards at the beginning of the school year, the cards are run based on the prior year’s membership records. Unfortunately, this means that some cards may be printed for individuals who have left the district in the new membership year.
Local membership chairs can help us to avoid this problem by providing the Membership Department in the summer months with a list of members who will not be returning the following school year. This can be done in writing or by e-mail. If this information is received before the annual printing of membership cards, the individuals can be dropped from the database and cards will not be printed for them. This saves money for the IEA and also saves time for the local Presidents, who do not have to sort out the retirees’ cards from those of active members.
New cards are printed every two weeks after the initial mailing goes out. This ensures that new members will get their cards within two weeks after their enrollment forms are processed.
7. I received a notice from the IRS saying that our local needs to file Form 990. What is this? Do we have to file it?
All tax-exempt organizations are required to file Form 990, “Return of Organization Exempt from Income Tax.” Since all of the IEA’s locals are not-for-profit, tax-exempt organizations, they are subject to the filing requirements. HOWEVER, organizations whose “annual gross receipts are normally $25,000 or less” are NOT required to file. For purposes of the $25,000 test, any IEA/NEA dues that are collected by the local and then forwarded to the IEA do NOT count. To put it another way, if your local dues, investment income, and other miscellaneous income do not normally add up to more than $25,000 per year, you do NOT have to file Form 990.
The latest version of Form 990 and its instructions are available under “Links” in this section of the IEA web site. If your local is close to the $25,000 threshold or you want further information, you should refer to the instructions or contact the IEA Director of Business Services at 800/252-8076 or randy.welch@ieanea.org. Note that there is a Form 990-EZ for organizations that meet the $25,000 threshold but normally have annual receipts that are less than $100,000.
If you receive a notice from the IRS regarding Form 990 and you determine that you do not have to file, you should still respond to the notice. Otherwise, they will continue to haunt you and you may end up with adverse consequences as a result. If you have questions about how to respond to the notice, please contact the Director of Business Services (above).
REGIONS ARE TECHNICALLY PART OF THE IEA AND DO NOT HAVE TO FILE FORM 990. If a region receives a notice regarding this form, the notice should be sent to the Director of Business Services so that we can provide a consistent response.
8. Another local treasurer mentioned that she had to file “Form 1099” for her local. What is this? Do we have to file it?
The IRS uses Form 1099-MISC to track the income of self-employed people, much as it uses Form W-2 to track the income of people who work for someone else. Therefore, it applies only to payments to individuals, as opposed to payments to corporations, not-for-profit organizations, etc. It does not apply to anyone who is your employee (you withhold payroll taxes from their payments). The forms must be filed by January 31 each year.
A separate Form 1099-MISC is filed for each person who is paid $600.00 or more by your local or region during any calendar year. The $600.00 is cumulative payments, e.g. paying someone $50.00 per month would require filing a form for them.
The $600.00 pertains only to payments for services or rents. In other words, buying supplies or other products from someone does not “count,” nor do reimbursements to your officers or members for business expenses that they have incurred. Examples of the latter include reimbursing them for expenses at the RA, reimbursing them for supplies that they purchased for your organization, etc.
Generally, the “reimbursement” exclusion only applies if the person provides you with receipts that support the expenditures. If someone gives you a note that says “Please reimburse me for $20.00 that I spent on supplies,” and you pay them the $20.00, that counts toward the $600.00. If they give you a receipt from Staples that shows that they paid $20.00 for supplies, and you reimburse them, that does not count.
Please note that payments less than $600.00 can be reported as well, at your option. An example would be where someone is given an advance to go to the RA and then either does not go or else does not provide documentation of expenses. If you give someone a $500.00 advance and they meet one of those conditions, you are justified in reporting the $500.00 to the IRS on Form 1099.
If you must file one or more Forms 1099, there is a short cover sheet called Form 1096 that must accompany them. Sample copies of both forms, and instructions, are available under Forms and Publications on http://www.irs.gov/,
and are also available under Links in this section.
Contact the IEA Secretary-Treasurer or the Director of Business Services if you have questions.
9. Board Policy #8 says we have to budget $3 times the number of members every year for “mediation, arbitration and fact-finding” in order to qualify for financial assistance from the IEA for these items. If we already have this amount of money set aside in a separate bank account, why do we have to put it in the budget? This increases the dues by $3 when we already have the $3 per member set aside.
The Board Policy is pretty explicit about having the $3 per member in the budget in order to qualify. IF you have this amount of money set aside in a strike fund, an acceptable way to get the $3/member into the budget without affecting the dues requirement would be:
Put the $3/member in the INCOME section of the budget as “Transfer from Strike Fund.”
Put the same amount ($3/member) in the EXPENSE section of the budget as “Mediation, Arbitration and Fact-Finding.”
With this approach, the $3/member is in the budget but the income and expense line items offset themselves so there is no impact on the dues requirement.
This approach only works if your local has a separate, dedicated fund for strike purposes and the balance in the fund is at least equal to the $3 per member.
10. How do membership "drops" and "adds" affect RA delegate allocation?
Delegates for the NEA RA are determined based on membership transmitted to the Membership Department as of January 15 of the current membership year. (Actual Delegate counts are processed on January 31). Delegates for the IEA RA are based on membership counts as of July 31 of the previous year.
If a member leaves the local prior to July 31, but the local does not notify Membership Processing until after July 31, he/she is still counted as member for delegate purposes for the IEA RA. Conversely, if a member joins a local prior to July 31 but the enrollment form is not processed until after July 31, he/she is not counted as a member for delegate purposes. Please remember that the membership year runs from September 1 to August 31, by the July 31 delegate count, the membership year is virtually over, so these issues are rare.
The same process would apply to the NEA RA counts in January.
If a local notifies Membership that a person is retiring at the end of the school year, that person will remain on the roster until the end of that year. For example, if in January 2007 a local notifies Membership that a person is leaving at the end of the 2006-2007 year, that member will remain on the 2006-2007 roster. It is assumed that full dues will be collected from that member. That membership will count for delegate purposes. Assuming the transaction is handled correctly, a local is not penalized for reporting its year end drops before the end of the year.
It is important that region chairs contact the President’s office if there is any question about the membership figures that are sent to them. Adjustments can be made when circumstances dictate.
11. Does our local have to file any reports with the State concerning our political action fund?
If your local’s political action committee either receives or disburses more than $3,000 in
any 12-month period (not necessarily a calendar year or your fiscal year), it may be subject to the reporting and disclosure requirements of the State Board of Elections. These include the initial registration on Form D-1 and then ongoing periodic reporting of activities on Form D-2.
Once your organization meets the $3,000 threshold once, it is required to continue to file the D-2 forms even if the threshold is not reached in subsequent years. There can be substantial fines for failure to do so. Please note that the D-1 must be filed within either five or ten business days after you meet the threshold, depending on how close you are to the next election, so it is important to be aware of your PAC’s status with respect to the threshold and to be aware of your reporting requirements before the threshold is actually met.
When determining whether your local PAC is subject to the disclosure requirements, please keep in mind the following:
- Your regular local IPACE rebate (up to $10 per member) does NOT count as a receipt in terms of the $3,000 annual threshold.
- Expenditures either in favor of, or in opposition to, a candidate for local public office (e.g. school board) OR a question of public policy (e.g. a referendum) DO count toward the $3,000 annual threshold.
- Expenditures for more general political purposes such as political education, “meet the candidates” events, etc. do NOT count toward the threshold.
Questions about filing requirements should be directed to the State Board of Elections, your IEA lobbyist or the Director of Business Services.
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