Nonprofit Law/Baseball Team



I am a player/coach of a semi pro baseball team in Biloxi MS. I am hoping to get the majority of our expenses (Umpires, field fees) paid for by the use of sponsors. The total expense would be around $4000. Would I have to claim the money I receive from these sponsors? If so roughly how much would I have to pay.

If I chose to be a non profit organization how do I go about doing this and how much will it cost?

Thank you

ANSWER: First I should inform you that teams that are composed of players above the age of 18 (other than school teams) do not qualify for 501(c)(3) organization status with the IRS.  That is the type of organization that allows donors (or sponsors) to deduct donations as charitable contributions.  There are other types of nonprofits, such as the 501(c)(7) recreational or social organizations about which the IRS writes some details at
Please note that donations to such organizations are not deductible by the donors. on page 72 - last column "Contributions Deductible" - No

Also such an organization may be granted and be able to maintain exempt status easily only if it does not receive more than 35% of its gross receipts from outside its membership and receives no more than 15% of its gross receipts from nonmember use of club facilities.

Therefore, I don't see any type of nonprofit (as listed on page 72 or 73) you would qualify under.

I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations. But I will inform you that, if sponsors receive something tangible in return for their payments (such as advertising), they may be able to deduct those payments as regular business expenses. If they are not getting anything tangible in return, your team would not have any taxable income from those gifts. The Internal Revenue Code at section 102(a) provides that generally
gifts are not income.  "Gross income does not include the value of
property acquired by gift..."

However, section 102(c) of the Code has "Subsection (a) shall not
exclude from gross income any amount transferred by or for an
employer to, or for the benefit of, an employee...."
Therefor, if your team is incorporated and the sponsors give the funds to the corporation, any payments from the corporation to you individually would be taxed as regular employment income.

Harvey Mechanic, Attorney at Law -

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.    

[an error occurred while processing this directive]---------- FOLLOW-UP ----------

QUESTION: Thank you very much for your help. If my players would have to pay something out of pocket do I need to claim that as well?

You are welcome. If your players are paying you for services you provide to them, then yes, that is taxable as employment income.

Harvey Mechanic, Attorney at Law -

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


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. 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 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 "" without the quotes and then add your search terms before hitting enter.


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.


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

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

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