Photo courtesy ASMP member William Jones
Financial Reporting Requirements
Who are you?
After board members and officers are elected (presumably every year), the only way that the National Office can know who they are is by your telling us. Otherwise, we will keep on sending the old board and officers information and documents that you should be getting. So, your first reporting responsibility is to let the National Office know the names, offices held and current contact information for all of the board members and officers. You should update this information every time there is a change, including changes in contact information. At a minimum, you should let the National Office know the results every time there is an election.
Internal Revenue Service Reporting
Under IRS regulations, ASMP chapters must file a federal tax return in certain instances. Fortunately, National can assist you with filing federal forms.
Tax exempt? ASMP is a tax-exempt organization under 501(c)(6) of the Internal Revenue Code. This means that funds received through those parts of its operations that are related to its tax-exempt purposes are exempt from federal income tax. Other receipts are not exempt. As a quick rule, sponsorship dollars are exempt, while fees for advertising (in newsletters or on a website) are taxable.
ASMP is not a charitable organization exempt under 501(c)(3). Contributions to ASMP are generally not tax deductible (except for contributions to the Legal Action Fund which may be deductible as business or legal expenses). Contributions to the Foundation are deductible, which is one of the primary reasons that it was created.
What About State and Local Taxes?
With one or more chapters located in different states, it is impossible to tell each of the chapters what its state and local reporting requirements are. Typically, there are income tax filing requirements that are roughly parallel to the federal requirements and that often require attaching a copy of the federal returns to the state returns. There may also be state or local franchise taxes, as well as other taxes, along with licensing or registration requirements.
To find out the requirements in your state and community, you should start by checking with your state’s department of revenue. Your inquiry should be on a general basis without referring to ASMP: “Hi, could you please send me information on the filing requirements for 501(c)(6) trade associations?”
You should also call the local bar association to see if there is a local Volunteer Lawyers for the Arts or similar organization that can refer you to lawyers who will give you some basics without charge. Similarly, the local chamber of commerce may have such information and/or may have a local business volunteers for the arts, similar to the lawyers’ organization.
Neither ASMP nor its chapters are exempt from state sales taxes.
What if You Get a Letter From the Feds etc.?
If you are ever contacted, by letter, fax, phone or otherwise, by any representative of any government about a situation that is or could be a problem, or even one just asking for information, contact the National Office immediately! Do not try to deal with this yourself or at the chapter level, and do not sit on it while trying to figure out what to do. Doing so will not avoid any embarrassment and will not make the whole thing just go away — it will just make it worse. The same is true if you ever get a letter from a lawyer suggesting any kind of claim against you, the chapter or ASMP. Refer all such matters to the National Office without delay. Do not even stop to think about it. The only thing that you are ever likely to be criticized for is delaying in passing that sort of information along.
Liabilities of Chapters
- Failing to File Returns and ReportsThe most likely source of liabilities for chapters, and their officers and directors, is the failure to file tax returns and other reports described above on time. All taxing and other governmental authorities will charge interest and/or penalties for late or non-filings. In addition, remember: there is only one ASMP; the liabilities of one chapter can affect every other chapter and the national organization.
- Anti-trust MattersThe largest single source of potential liability is in the area of anti-trust law violations that can occur from statements made in chapter meetings or chapter publications (including the chapter’s website). Any suggestion of an attempt or agreement that would tend to restrain trade or limit the free actions of market forces could bring the U.S. Department of Justice, the Federal Trade Commission, and/or state Attorneys General down on all of us. The potential punishments for violations include jail time and fines that can be in the millions of dollars. If a law enforcement agency decides just to make an investigation, the legal costs to ASMP would almost certainly be in the hundreds of thousands of dollars. This is very serious stuff.
Compounding matters is the fact that it can be very easy to violate these laws without having any intention of doing so. For example, the mere statement that “editorial photographers should get together and agree not to work for a day rate of less than $500” would get the speaker or writer, the chapter, its officers and directors, and the meeting chair/newsletter editor/webmaster in big trouble, very fast. For this reason, you should be especially aware of the following ASMP policy relating to editorial review:
- Chapters are required to submit for national review any information to be published by any means or in any media by the chapter which contains any mention or treatment of rates, fees, prices, terms and conditions of transacting business by photographers or which gives legal advice or analysis, or which refers to clients or suppliers.
- Defamation, Libel, Slander, Tortious Interference With Right to Contract, etc.Any time you publish (including the spoken word and written words distributed via any medium) a negative or critical statement about a person or entity, you are in danger of committing one of those acts grouped under the name of Defamation of Character. Defamation opens up the door to lawsuits which, even if you win, can be very, very expensive. That is why ASMP is extremely careful about what it publishes about its members’ business problems with various clients. That is also the reason for the last phrase (“… or which refers to clients or suppliers”) in “Anti-Trust Matters,” above.
- Sitting on Membership ApplicationsIf you do not promptly process and forward to the National Office membership applications for new members and upgrades, you expose yourself and ASMP to claims of discrimination or anti-competitive practices. These are as serious as, and in some cases related to, anti-trust law violations. Please view the processing of applications as one of your highest priorities.
- SummaryAn astute judge once said that we live in a nation populated by litigious paranoids. Anyone can sue anyone else for anything, no matter how ridiculous, and they often do. So be careful out there and always remember to call the National Office any time you even wonder about whether and how you can do or say anything. ASMP exists to serve its members, and that applies equally to those times when its members are acting as chapter officers and directors.