Tax obligation: director of CIC but no income

Hello! I'm considering agreeing to become a director of a community interest company (CIC) of a new organization with low operating costs (under 50k). As a director, I would not receive a salary or income of any kind. Does this mean that I'd have any additional reporting obligations to IRS?

I'd love to say yes to this organization and get stuck in, but the worry that the IRS will somehow get involved is holding me back. Any tax experts?

Thanks!

Hello! I'm considering agreeing to become a director of a community interest company (CIC) of a new organization with low operating costs (under 50k). As a director, I would not receive a salary or income of any kind. Does this mean that I'd have any additional reporting obligations to IRS?

I'd love to say yes to this organization and get stuck in, but the worry that the IRS will somehow get involved is holding me back. Any tax experts?

Thanks!

If the post involves having signature authority on any financial accounts, you would have to add them to your FBAR.

I'm not a tax expert but my immediate thought would be to do with FBAR reporting.  If you have signatory authority over financial accounts with aggregate balances greater than $10k you may have to include any account where you authorise payments even if the money does not belong to you.

Below is a link that may be useful.

https://www.greenbacktaxservices.com/blog/fbar-overview-penalties-options/

FBAR also applies to those who simply have signing authority over an overseas account. That’s important to remember, as the account doesn’t have to be your account. To explain further, signature or authority means the authority of an individual to control the disposition of money, funds or other assets held in a financial account by direct communication to the person with whom the financial account is maintained. So, for example, if you were a signatory on one of your employer’s bank accounts, this account should be reported on your FBAR form.

I am a director of our self-managed housing estate's limited company. However, I specifically declined having signature authority over the company back account as we have a sizable reserve. I have to do a FBAR for our personal accounts and did not want to add another to the list.

As a director, you may not need to have anything to do with the back account w/r/t signature authority. That would solve your reporting obligation to the Treasury Dept. As for the IRS, if you receive no income, you have nothing to report on your 1040.

Thank you to all of you! Feeling much more comfortable accepting the directorship while declining any signature authority.