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Nonprofit Law/501 c 3 HS Crew Booster Club?

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Question
Hello Mr Mechanic,

We are a 501 c 3  High School crew team funded partially by school Coaches, buses, non metal regattas, facility fees, The remaining cost approximately 50,000 of the 100,00.00 it cost to run the program, by Falcon Crew Booster Club .  We have mandatory fundraising and fees to cover this coast to insure to existence of our program.  We currently have parents (mostly senior) who are refusing to pay our required fees as stated in by laws and our handbooks. Stating we cannot discriminate against their children.  Our fees have been increased this year due to their lake of participation in our fundraising. These parent are well capable of paying the fees and we feel doing this maliciously.  
With out their payment of our required fees it will cause hardship to our program . As we have to pay for their rowers to enter several regattas and pay for upkeep of their equipment and related fees.  Our fees are clearly stated in our handbook and at every meeting.  As well as our president requesting anyone with hardship to contact him or anyone on the board it will be kept confidential. No one has come forward.  Thank you for your time Karen Woltmann OHS Crew

Answer
My summary of IRS regulations relating to 501c3 booster organizations is at:
http://goo.gl/RO1ez  you may be interested to read that. You will see there that such a booster organization may not require membership or fees to be paid by the beneficiary families.  
If there was such a requirement then they would be a cooperative and not a charitable organization. A charitable organization, like the Red Cross, does not require beneficiaries to work for the Red Cross in order to receive benefits.

In denying exemption to a purported 501(c)(3) organization
in 1992 the IRS at http://goo.gl/e9Mkd
on page 6 stated "The reason you were created and your method of
operation indicate that you are made up of a group of parents who
have joined together to work cooperatively to provide funds to pay
for the participation of their children in athletic events. The
expenses incurred by these children would otherwise have been paid
by the parents.  All parents of competitive team members are
automatically members of your organization.  Accordingly, members
expect to receive a benefit in return for their membership.  You
pay no benefits to non-members."

Another, similar denial of exemption was issued by the IRS in
1990 and may be viewed at
http://goo.gl/3CVwT

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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