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Nonprofit Law/LIttle League Baseball

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Question
I would like to know if the board of a 501c3 non profit,(in this case a local Little League in California) can waive player registration fees for parents that volunteer their time as a coach and/or board member with said little league. As far as I know, no other parent volunteer (non-coaches) are given this waiver,including umpires. The reason for the waiver is because of "the time that coaches and board members give to the league and all of it's participants". By doing this, wouldn't it be considered "compensation" of some sort?

Current participation/registration fee is $100.00 per player. Of that $100.00 in fees, $25.00 is mandated fundraising. No other requirement is necessary. All parents are asked to volunteer for the league , but are not forced to do anything, other then the mandated fundraising which is part of the registration fee.

Answer
The IRS explains  at:
www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf on page 72-73
(takes a while to load as it is a 91 page pdf file):
--start of excerpt  ---

The use of the term "volunteer" generally has no significance in
applying the tax law....

A volunteer is an employee if an entity has the right to direct and
control the volunteer's performance, not only as to the results to
be accomplished, but also as to the methods by which the results
are accomplished.  It is the "right" to control, even if the entity
does not exercise the right, that is important. Many factors in an
employment relationship have to be considered before a decision can
be made as to whether the entity has the right to direct and
control.

If an entity does not retain the right to direct and control the
details and means of performing the work, the volunteer worker is
not an employee [would be an independent contractor].
--end of excerpt  ---

That publication explains that fringe benefits like reduction or elimination of fees are taxable and which are not.  See, specifically, on page 18 the discussion "Qualified Employee Discounts" explains that type of exclusion cannot exceed... "  For services, no more than 20% of the price charged to the general public for the service."

The 80% (in your case $80) is taxable compensation.

By the way, you did not ask, but that $25 credit given in exchange for fundraising for the other parents is taxable as compensation. In June of 2011 that IRS wrote:
---Start of Excerpt--
If a booster club confers a benefit on a participant in return for
their fundraising activities, such as by crediting amounts raised
by a participant toward that participant's dues requirement, or by
crediting amounts raised against the cost of a trip, the booster
club is providing a private benefit to that participant.
Consequently, such practices could result in the organization
failing to be described in 501(c)(3).
---End of Excerpt---
www.irs.gov/pub/irs-tege/booster_club_field_directive_6-27.pdf

The IRS continued in the next paragraph,

"It is also possible that
amounts credited to a participant's account due to fundraising
would constitute income from services, and could result in
employment taxes."

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 possible 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. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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