Question

a) Section 3.3. states that "The chapter leader is responsible for submitting an annual general ledger to the DFI treasurer by April of each tax year." Does this only apply to Chapters within the US that are deemed a business? Or to Chapters within and without the US that have been incorporated in some way? Or does it apply to all Chapters, even the ones who proceed as unincorporated entities? (We're pretty sure it applies to all, just checking to confirm it.)

b) Section 6.3. was somewhat dubious in our reading: is there any possibility that a United States tax authority would require any payment or tax return for a Chapter outside of the US?

c) Section 8. states that "Chapter shall maintain Commercial General Liability with commercially reasonable limits for the scope of liability in this agreement. Chapter shall also obtain event insurance for each event with commercially reasonable limits for the scope of liability in this agreement. Each insurance policy shall name DFI as an additionally insured. Upon written request by DFI, Chapter shall provide it with a copy of the certificates of insurance for all coverage under this Section." (the highlighting is ours). This seemed to us to be unnecessary, especially in light of what is explicitly laid out in Sections 6. and 7.. A case can be made for insurances on the Chapter part, but could the highlighted sentence not be made the object of a Waiver between the two parties?

Answer

a) If there are any ticket sales/money exchanges as part of chapter events, there needs to be accurate and up-to-date financial records. All chapter leaders are responsible for submitting and annual general ledger to the DFI treasurer. This is to ensure transparency and accountability across the organization. Additionally, to maintain our non-profit status in the United States, we are required to verify that any “income” collected by chapters affiliated with us is from events/content related to our core values (in other words—you are not an outreach of our organization functioning as “for profit”). Some chapters don’t ever charge for their events and thus no records are necessary—a letter from the chapter leader verifying that no money was collected fulfills this Section requirement.

b) You are correct in that U.S. Tax requirements do not apply to international chapters. However, you are bound by whatever local, state, federal tax regulation might apply based on your geographical area. We cannot advise you on those regulations.

c) This Section indicates that should something happen during one of your chapter events, DFI as an organization is not to be held liable (ex: injury, damage to property, etc). Therefore, depending on local/state/federal regulations, individual chapter leaders might be held liable for such occurrences.