Associations
Audits, Form 990, UBIT, and dues and lobbying disclosure support for trade associations, professional societies, and other membership organizations.
Overview
Trade associations, professional societies, and chambers of commerce are typically exempt under IRC Section 501(c)(6), and their finances look different from those of a charity. Dues are the core revenue stream, often alongside conferences, sponsorships, publications, and certification programs. Many associations also advocate on behalf of their members, which brings lobbying and dues disclosure rules into play. Pease Bell works with associations and similar membership organizations on audits, Form 990, and the tax questions that come with a mix of exempt and commercial activity.
Association boards and finance committees need financial statements that members trust and tax filings that reflect how the organization actually operates. We audit association financial statements, prepare and review Form 990, and help identify revenue that may be unrelated business income. We also help associations understand, at a general level, how lobbying activity affects the dues information they provide to members, and we coordinate with related foundations or PACs where they exist.
How We Help Associations
Association Audits
Financial statement audits and reviews for associations, with attention to dues revenue recognition, deferred revenue, event income, and the reserves boards use to plan for the future.
Form 990 Preparation
Preparation and review of Form 990 for 501(c)(6) and similar organizations, including governance, compensation, and program information that members, prospective members, and the public can read.
UBIT Review
Review of advertising, sponsorship, affinity, and other revenue streams to identify unrelated business income, and preparation of Form 990-T where it is required for the association.
Dues and Lobbying Disclosures
Help tracking lobbying and political expenditures and understanding how they affect the nondeductible portion of dues that associations communicate to members under IRC Section 6033(e).
Related Entity Coordination
Accounting and reporting support where an association has a related charitable foundation, PAC, or for-profit subsidiary, so intercompany activity and cost sharing are documented consistently.
Budgeting and Board Reporting
Help building budgets and financial reports that finance committees and boards can use to monitor dues trends, event performance, and reserve levels between annual audits.
Challenges We Help Associations Address
- ✓Recognizing dues and event revenue in the right period
- ✓Identifying advertising and sponsorship income that may be taxable
- ✓Tracking lobbying costs and communicating dues deductibility to members
- ✓Coordinating finances with related foundations, PACs, or subsidiaries
- ✓Planning reserves when membership and event revenue fluctuate
Frequently Asked Questions
What is a 501(c)(6) organization?
A 501(c)(6) organization is a tax-exempt business league, such as a trade association, professional society, chamber of commerce, or board of trade, organized to improve conditions in a line of business. Unlike a 501(c)(3), contributions to it are generally not deductible as charitable gifts, though dues may be deductible as a business expense in part.
Do associations pay tax on advertising and sponsorship income?
They can. Revenue from a regularly carried on trade or business that is not substantially related to the association’s exempt purpose may be unrelated business taxable income, reported on Form 990-T. Advertising is a common example, while qualified sponsorship payments are treated differently. We review these revenue streams and help determine what should be reported.
How does lobbying affect association dues?
Under IRC Section 6033(e), many 501(c)(6) associations that lobby must tell members the portion of dues allocable to lobbying and political activity, which members cannot deduct as a business expense. Alternatively, the association may pay a proxy tax. We help associations track these expenses and understand their disclosure options at a general level.
Does an association need an audit?
An audit is not federally required for most associations, but bylaws, boards, lenders, or members often expect one. An audit gives independent assurance over dues, events, and reserves. Some associations choose a review instead. Pease Bell can help your board decide which level of service fits your needs.
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Contact Us
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