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The1calledTKE · #1 09-10-2002, 07:16 PM

TO: Grand Province Advisors, Province Advisors, Board of Advisors Chairmen, Alumni Associations, Chapter Advisors, and Prytani of Chapters

FM: Kevin M. Mayeux, Executive Vice President/CEO

RE: Section 6113 of the Internal Revenue Code

Section 6113 of the Internal Revenue Code imposes a requirement on not-for-profit tax-exempt organizations that a "conspicuous and easily recognizable" statement appear on all fund-raising solicitations, including dues billings and housing invoices. The statement must specify that all contributions and payments made to the organization are non-deductible as charitable contributions for federal income tax purposes. This disclosure requirement became effective January 1, 1988. Failure to comply can result in a $1,000 per day penalty by the Internal Revenue Service.

This disclosure requirement is applicable to all organizations exempt from taxation under 501(c) of the Internal Revenue Code (which includes most TKE corporations) except 501(c)(3) organizations. Other than TKE Educational Foundation, I am aware of very few TKE corporations that are 501(c)(3) organizations. Even though the regulation applies only to organizations having $100,000 or more in gross revenue per year, it is recommended the provisions of the code be followed by TKE chapters, house corporations, and other entities.

We have been advised by our legal counsel, Leagre, Chandler & Millard, the following language should appear on all fund-raising solicitations , dues billings, and invoices:

"Contributions and payments to (insert name of chapter, Board of Advisors, house corporation, etc.) are not deductible as charitable contributions for federal income tax purposes. However, they may be deductible under other provisions of the Internal Revenue Code."

We encourage this information to be adopted by your chapter, colony, Board, etc., to avoid any IRS complications. Also be aware that even though your chapter or other entity does not meet the $100,000 gross revenue rule, there may be state or local statutes regarding fund-raising project (raffles, bingo, a-thons, etc.) requirements which may involve registration, licensing, or the same type of statement regarding non-deductibility of payments or purchases. Before embarking on any project of this nature, local ordinances should be checked.