June 2018

Brother Knights,

Thank you to all who attended the State Convention last month and for your vote of confidence by reelecting me as your State Advocate for another term.  I want to extend a special thanks to the Grand Knights who sat on the Resolutions Committee:  GK Gordon Rodewald, III; GK George Doty; GK Gary Cloninger; and GK Jim Chambers.  You all were instrumental in facilitating an efficient resolutions process during the convention. Also contributing was DD Brad Smith, who provided invaluable legal insight during the review leading up to the convention.  Thank you all!!

Grand Knights and District Deputies should be wrapping up any needed action to ensure council tax exempt status is in good standing before we begin the new fraternal year in July.  In addition, designated council leaders must ensure they are compliant with the Knights of Columbus Safe Environment training requirements.  If key leaders fail to meet the Safe Environment training requirements, their councils risk losing their eligibility for Star Council this year.   Get the training done this month online through the Supreme Website’s Praesidium link: http://www.kofc.org/en/members/programs/youth-activities/safe-environment-program.html. We must have 100% compliance.  The April bulletin listed non-compliant councils.  Grand Knights, if your council is on the non-compliant list, then “get ‘er” done by June 30, 2018.

Over the course of this fraternal year, many councils have asked for clarification about their tax status.  The following Tax FAQs are taken from the Officers’ Desk reference - Supreme Website, and presented here in response to those questions.

1) Is the Knights of Columbus a charity recognized by the Internal Revenue Service (“IRS”) under Section 501(c)(3) of the Internal Revenue Code (“IRC”)?

 No.  The Knights of Columbus is a fraternal benefit society recognized under IRC Section 501(c)(8). 

2) Are all Knights of Columbus councils and assemblies in the United States eligible to be recognized under Section 501(c)(8)?

Yes.  As a unified corporate entity, the Knights of Columbus encompasses not only the Supreme Council, but all subordinate units (i.e., state councils, local councils, chapters, and assemblies).  Accordingly, all subordinate units in the United States may be recognized by the IRS as “fraternal lodges” under Section 501(c)(8).  In order to be recognized under Section 501(c)(8), each council, chapter, or assembly must provide its Employer Identification Number (EIN) to the Home Office Legal Department, which in turn will report the EIN to the IRS for inclusion in the Order’s group exemption listing.

3) Are all Knights of Columbus councils and assemblies in the United States exempt from federal taxation?

The Knights of Columbus Supreme Council and its subordinate units in the United States are generally exempt from paying federal income tax on ordinary receipts (e.g., funds received for charitable or fraternal purposes).  However, unrelated business income would be subject to federal income taxation.  See IRS instructions for Form 990 or Form 990-EZ.

4) Are Knights of Columbus councils and assemblies exempt from state sales tax?

Generally, state legislatures grant state sales tax exemptions or state or local property tax exemptions only to charitable organizations recognized by the IRS under Section 501(c)(3).  Since the Knights of Columbus is not recognized as a charitable organization under Section 501(c)(3), councils and assemblies are not generally eligible for a state sales tax exemption, although the exemption may be available in certain states. 

5) Are donations to Knights of Columbus councils and assemblies deductible on the donor’s income tax return?

No.  Donations to Knights of Columbus councils, assemblies, and chapters for fraternal or social purposes are never deductible and most donations for charitable purposes are not deductible.  Donors who wish to claim a tax deduction for a charitable contribution to one of the charities supported by the Knights of Columbus may do so by donating to Knights of Columbus Charities, Inc. (U.S.), Knights of Columbus Canada Charities, Inc. (Canada), or a charitable corporation established by one of the State Councils.

*Unless otherwise expressly stated, the guidance set forth in the Officers’ Desk Reference does not constitute tax advice on which any individual member of the Knights of Columbus or any subordinate unit may rely in determining his or its obligations and liabilities under the revenue laws of any jurisdiction.  Council and assembly officers are responsible for ensuring compliance with all applicable tax laws and regulations and the accuracy of all returns filed with any taxing authority.  To this end, we encourage all subordinate units to consult with a competent tax advisor if they have any questions or concerns about their obligations and liabilities under the revenue laws.

Vivat Jesus!

Fraternally,