Delta Sigma Phi Fraternity Inc National Headquarters

PART X, LINE 2:

“Explanation: income taxes: the fraternity is a not-for-profit organization that is exempt from income taxes under section 501(c)(7) of the internal revenue code and similar state laws. The exemption is on all income except unrelated business income as noted under section 511 of the internal revenue code. Internal revenue code section 513(a) defines an unrelated trade or business of an exempt organization as any trade or business which is not substantially related to the exercise or performance of its exempt purpose. Certain nonmember income, that would otherwise be taxable, may be set aside. Any income that the grand council has properly set aside must be used for the qualifying purposes outlined in the set aside resolution. Accounting principles generally accepted in the united states of america require management to evaluate tax positions taken by the fraternity and recognize a tax liability if the fraternity has taken an uncertain position that more likely than not would not be sustained upon examination by various federal and state taxing authorities. Management has analyzed the tax positions taken by the fraternity, and has concluded that as of june 30, 2014 and 2013, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the accompanying financial statements. The fraternity is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The fraternity has filed its federal and state income tax returns for periods through june 30, 2013. These income tax returns are generally open to examination by the relevant taxing authorities for a period of three years from the later of the date the return was filed or its due date (including approved extensions).”