the Eagle Has Landed

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The Purpose:

The web site is by design to discuss the trade of process serving, this includes non profit associations that are granted tax exempt status related to their interest in the trade of process serving. It is designed to critically discuss the issue of process serving industry. It is non commercial. By design this page will be used to share with and petition government legislators and rule makers so they can be fully informed via direction to and interaction with its content as it may relate to their legislative or regulatory (civil or criminal) activities regarding process servers.

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CALIFORNIA Tax Returns


2004 2005 2006 2007 2008 2009 2010 2011

 

When you look at 2011 taxes for California you will notice in schedule O an amount of $4225.00 relating to website revenue earned via advertising and $6425.00 in directory revenue earned. That amount reflects a proper reporting of taxable advertising revenue of which Calspro paid taxes on. It is called Unrelated Business Taxable Income (UBTI) for tax exempt entities and is taxable if properly reported like CALSPRO has done.

As compared to NAPPS in 2011 they are over $200,000.00 in taxable advertising revenue they do not report. This would equal over $80,000.00 in taxes for the one year. In addition, as NAPPS is concerned, the administrators simple contract just awarded on November 17, 2012 for $1,200,000.00 million dollars for five years is based on the accepted simple proposition as a percentage of revenue. So the administrator includes $80,000.00 as revenue in the simple percentage calculation for his contract. Whatever percentage he chooses and the board approves increases his contract by 80K of tax that was evaded and included in the total revenue calculation. So if the contract is based on 30% of total revenue this $80,000.00 not paid in taxes increases his annual salary by $24,000.00.

That is why revenue based contracts in a non profit are bad . Suppose next year that amount is corrected or for some reasons revenue drops. The contract as written is not tied to percentages of revenue even though it was the basis for approval. In other words the administrator contract will go on regardless of consequences to revenue in the next five years.

Should a correction occur there are several solutions. One the contract becomes void based on the facts used to support it. Or two the board members who supported it would be obligated to pay the difference personally themselves.

Thank you for visiting! Feel free to view the links on the left and peruse the site. It will be updated aggressively in the comings days.

This page was last Updated Monday June 15, 2015 12:47 PM