Nonprofit Law/Travel Ball
A friend and I have started a travel softball team in Georgia (2012), and was wondering if we should file for a 501(c)3 to help with the expense of the team in 2013. If so, I know think we waited to late for the 2013 season.
Last year all the games and registration fees where all paid by the parents (fees divided by players) and no one complained about the cost. Without 501(c)3 I do not think they are deductible.
Should we do a 501(c)3 for fundraising?
You are correct that the parents may not deduct registration and other fees.
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
After the initial set up, you would need to apply for
a EIN (tax id number)
and then you could apply for the IRS exemption
determination letter which could be effective
retroactively to the date of establishment of the
organization. The IRS minimum filing fee for such a
determination letter is $400 and goes up to $850.
See the IRS Publication 557 "Tax Exempt Status for Your
in the right column on page 25 under "Organizations Not
Required to File Form 1023" discusses who does not need
to file and among those is "Any organization (other than
a private foundation) normally having annual gross
receipts of not more than $5,000. These organizations
are exempt automatically if they meet the requirements of
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
The Application for Exemption is at:
The IRS may take months to issue the exemption determination
letter, but as long as you file your exemption application within
15 months and are approved for exemption status by the IRS you may
begin full operations upon state incorporation.
See IRS Publication 557 "Tax Exempt Status for Your Organization"
which has on page 24, right column, under the heading ""Effective
date of exemption" that the exemption determination is granted
retroactively to the date of formation which is normal for
501(c)(3) organizations that apply for exemption within the first
15 months of their formation. "If the organization files the
application within this 15-month period, the organization's
exemption will be recognized retroactively to the date it was
Note that sales activities by a family would need to benefit the whole team. My summary of IRS regulations relating to 501c3 booster organizations is at:
and you may be interested to read that as it applies also to your situation if you organize a 501(c)(3) organization.
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.