[Board] Stipend

[treasurer at portsmouthyc.org]

I’m afraid you missed the point. The world has changed substantially since the club’s constitution was written, and the IRS has gotten far more aggressive. Per IRC section 3231(e)(1), compensation is defined as “any form of money remuneration paid to an individual for services rendered as an employee to one or more employers.”  The last thing we want is for the IRS to decide that stipends and waived dues are taxable income and have been for as many years as they are allowed to go back. We have to be absolutely clear in our wording unless you want to be charged with tax evasion. The wording I used below indicates clearly that the dues waiver and stipends are gestures of appreciation and reimbursement of expenses. The word “compensated” is no longer innocent, it’s a red flag. 

 

From: Board <board-bounces at portsmouthyc.org> On Behalf Of Whitney T Weller
Sent: Saturday, July 30, 2022 8:25 PM
To: treasurer at portsmouthyc.org
Cc: Board of Directors <board at portsmouthyc.org>
Subject: Re: [Board] Stipend

 

Thanks Doyle:

 

 

Let’s check what the C&B says and follow suit.

 

The C&B says the Secretary and Treasurer “shall be compensated” as the BOD deems necessary.”

 

Best

 

W

Whitney Weller





On Jul 30, 2022, at 7:35 PM, treasurer at portsmouthyc.org <mailto:treasurer at portsmouthyc.org>  wrote:



Whit –

There is a problem in the recent Newsletter with the way you worded the benefits given to the Secretary, Treasurer, and Communications Officer. These are not paid positions as are the Steward and dockhands whose salaries, wages and tips are reported to the IRS as taxable income. The IRS is very particular about how certain words are used, and the word “compensated” is one of them. Those three officer positions are NOT compensated, nor are they paid. To publicly say they are either compensated or paid opens a can of worms with the IRS that we definitely do not want to get into. The IRS interprets the words “compensated” and “paid” to mean “taxable income”. I realize that you have probably not had to deal much with the IRS and that the wording you used was not intended to cause trouble, but it needs to be restated:

 

The Secretary, Treasurer and Communications Officer are volunteer positions filled by club members. In appreciation of their service, their dues are waived. They are also given a stipend, the amount of which is determined by the Board of Directors, to reimburse the various and sundry expenses they incur in fulfilling their duties.  

 

Please modify the newsletter immediately to reflect proper wording. 

 

Thank you,

Doyle Skeels, Treasurer

Portsmouth Yacht Club

(603) 661-6269

treasurer at portsmouthyc.org <mailto:treasurer at portsmouthyc.org>  

 

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