The Arc of Hunterdon County

PART X, LINE 2:

“The arc is recognized by the internal revenue service as a nonprofit organization under internal revenue code section 501(c)(3) and is thereby exempt from federal income taxes on related income pursuant to section 501 (a) of the code. The arc is also exempt under title 15 of the state of new jersey corporations and associations not for profit act. Accordingly, no provision for federal or state income taxes has been presented in the accompanying financial statements. Arc properties is structured as a limited liability company under the internal revenue code. Under this structure, the profits, losses, credits and deductions of arc properties are passed through to the arc. Arc properties is a single member llc and a disregarded entity for federal tax purposes. The organization follows 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 positions. The organization does not expect a significant increase or decrease to the total amounts of unrecognized tax positions during the fiscal year ended june 30, 2017. However, the organization is subject to regular audit by tax authorities, including a review of its nonprofit status, which management believes would be upheld upon examination. The organization also 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. As required by law, the organization files informational returns with both federal and new jersey state authorities on an annual basis. The federal return is subject to examination by the authorities within three years from the latest filing date.”