Mendham Borough Library

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“The library is exempt from federal income taxes under the provision of section 501(c)(3) of the internal revenue code, and is also exempt from state income taxes under chapter 104 of title 54, revised statutes of the new jersey law. The library has also been classified as entities that are not private foundations within the meaning of section 509(a) and qualify for deductible contributions as provided in section 170(b)(1)(a)(vi). Accordingly, no provision for federal or state income taxes has been presented in the accompanying financial statements. The library follows the provisions of fasb asc, income taxes. The standard prescribes a minimum recognition threshold and measurement methodology that a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. It also provides guidance for derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition as they relate to those tax positions. The adoption of this change in accounting principle had no cumulative effect on amounts recorded in the financial statements for year ended december 31, 2015. The library does not expect a significant increase or decrease to the total amounts of unrecognized tax positions during the fiscal year ended december 31, 2015. However, the library is subject to audit by tax authorities. The library believes that it has appropriate support for the positions taken on its tax returns. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. Management believes its nonprofit status would be upheld upon examination. As required by law, the library files informational returns with both the united states federal and state of new jersey jurisdictions on an annual basis: form 990 with the internal revenue service, and form cri-300r with the state. The library is subject to examinations at any time within three years from the latest filing date for the federal return.”