AboutHarvey Mechanic Expertise US Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation.
To search my previous answers you can do a Google search: site:allexperts.com/q/nonprofit [with your other search terms appended].
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Education/Credentials B.S. Columbia University in New York City, 1970
J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude
Question QUESTION: Can a Booster Club only be designated for the varsity dance team. All funds, party, events, membership ect. exclude the jv dance team of the same school?
ANSWER: Certainly the IRS allows 501(c)(3) booster organizations for a particular varsity team. Note, however, that parties are not a valid expenditure for a 501(c)(3) organization. http://snipurl.com/boosterinf
is my summary of IRS regulations relating to 501(c)(3) booster organizations. You may be interested to read that.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
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QUESTION: I read your http://snipurl.com/boosterinf what I understood is that if you are like Booster Club A you can exclude the jv dance team, but if you are like Booster Club B and your jv should be included. It really depends on bylaws??
When you say parties are not a valid expenditure, would supplies for a royal ball be valid expenditure. What would be a valid expenditure?
ANSWER: The IRS used Booster Club B as an example of an organization that would be granted 501(c)(3) organization status.
www.irs.gov/pub/irs-tege/eotopica93.pdf is the IRS publication.
On page 1 is "This article will concentrate, in particular, on booster clubs aimed at supporting competitive gymnastics. Typically, the class of individuals eligible to benefit from such clubs is open. Any child interested in competing is eligible for a position on a supported team based on athletic skill." Are you coming to your conclusion as to "jv should be included" because you are stating that the youth who are now in the jv were never eligible to compete at the varsity level? In any case, what the IRS considers a "charitable class" may certainly include all those who are on the varsity team. Please note that the main problems with booster organizations in the IRS memo is that they were involved in a private facility (gym). You referred in your first question to "same school". Is that a public school (not a private facility)?
The expenditures of a 501(c)(3) organization are not for the social benefit of members (like a 501(c)(7) social club, as at:
www.irs.gov/irm/part7/irm_07-025-007.html
A 501(c)(3) organization is for educational, charitable or religious purposes, not for the private social activities of members. The reasoning by the IRS is that donations to 501(c)(3) organizations are deductible by the donors.
The purpose of the 501(c)(3) booster organization is to directly further the dance instruction and activity of youth and not for social events. It appears the a "royal ball" is a social event.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
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QUESTION: I come to the conclusion that the jv should be included because I thought a 501(c)(3) organization must include all. This is a public school with a jv dance team and varsity dance team. The jv team is not included in the booster club by laws so they are not included them at all.
If they are not a 501(c)(3) organization and just non profit do these same rules apply:
The purpose of the 501(c)(3) booster organization is to directly further the dance instruction and activity of youth and not for social events.
Our Booster Club is holding several car washes over the summer. At first the dance director issued a handout that this fundraiser was mandatory. After several discussions they removed mandatory, but these girls are being punished issued demerits for not turning in unsold tickets. Is this legal?
Answer The school may not conspire with the 501(c)(3) booster organization
to require membership or sales for funds to the booster organization. That would be conspiracy to evade taxation. Also the state education laws may prohibit such discrimination by the school but I have in my profile that this free forum is only for relevant IRS federal exemption issues of 501(c)(3) organizations. Your issues are also controlled by state law and states may differ somewhat with how they would treat such issues. As for the federal law, that would be a violation (conspiracy), as the 501(c)(3) organization does not have any good reason to turn over information to the school as to who is fundraising, unless it is trying to make the fundraising mandatory. http://snipurl.com/boosterinf
is my summary of IRS regulations relating to 501(c)(3) booster organizations. You may be interested to read that as it discusses such issues.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
