ASCMC Fined, Loses Tax-Exempt Status Due to Improper Filings

Copyright Craig Stanfill. Image via Flickr.

On November 24, the president of the Associated Students of Claremont McKenna College, CMC's student government body, notified the student body in an email that ASCMC lost its tax-exempt status due to three successive years of improper filings in tax years 2020, 2021, and 2022. In addition, the California Franchise Tax Board applied a $83 penalty to ASCMC. “Since being notified of this last Friday, our current CFO… and I are working diligently with CMC’s Business Office to regain ASCMC’s status,” she wrote. 

In an email to the Independent, she wrote that several factors contributed to the incorrect filings. ASCMC typically holds elections in March and appoints a CFO in April, resulting in turnover in financial leadership during tax season. In addition, ASCMC lacked internal checks on proper filings. “According to previous ASCMC officers,” she wrote, “there weren’t any oversight mechanisms in place to ensure proper filings in the past, whether internally or from the [CMC] business office.” Finally, she noted that previous notices from the California Franchise Tax Board “were sent to a variety of different addresses, none of which are accessible to us currently.”

However, she claimed the change in tax-status will have “minimal impact on ASCMC events and operations. The revocation of tax-exempt status means that ASCMC can no longer accept tax-deductible contributions, which we weren’t receiving anyways.” 

To prevent future errors, she noted that ASCMC has retained an accounting firm, which it will pay for out of its emergency fund. In addition, she wrote that “future CFOs will receive constant guidance from the CMC Business Office and DOS.” Finally, ASCMC has set up a designated mailbox in Story House to keep track of incoming notices.