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Nonprofit Law/field hockey booster club tax status


I am the president of our field hockey booster club. We have an EIN for banking purposes. I was under the impression that we were a 501c3 status, but I cannot find any documentation to support that. So, my questions are, is $5000 the most we can raise before we should file for a tax exempt status? And, is $5000 the most we can raise before we file a tax return? I don't believe we have ever filed taxes; however, I don't think we've ever had more the $5000 in our account at one time either. For audit purposes, is there an amount of money we shouldn't exceed in our account? We try to spend the majority of the money that is raised each year, leaving a small cushion for the next incoming board as a starter. What should we leave them with?

If you want donors to be able to deduct donations and not to have your sales income, if any, taxed as long as you comply with fundraising guidelines for 501(c)(3) organizations, you would need to establish a charitable trust, incorporate under a state's nonprofit corporation
law, or set up an unincorporated nonprofit association. Your organizing document would need to state that it is organizing under Internal Revenue Code Section 501(c)(3) and have other required clauses. You would have at least 3 directors, with control of the board not in related

The organization must have the required clauses in the organizational document even if your organization is not required to apply for federal exemption if you want the benefits of being an exempt organization. See, starting in the middle column of page 26 of Publication 557  under "Organizational Test". Samples start on page 77. Also you must operate as a 501(c)(3) organization (see that publication 557 for the general rules).

Let me know if you do, in fact, have such clauses in your organizing instrument and, if so, I will reply further as to the $5000 limit. Note that, if a corporation without the proper organizational document, the club must still file an annual return.  From page 2 of the IRS Instructions to Form 1120, "Unless exempt under section 501, all domestic corporations ... must file an income tax return whether or not they have taxable income."

If you do not care about giving donors the option to deduct donations and you don't have any sales income and are not a corporation, then there is no limit to the amount of funds that you can use for banking purposes without having to file a federal income tax return.  That is based upon the law of what is considered "taxable income". If this is your situation, let me know and I will reply further.

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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