Nonprofit Law/Youth Baseball Team
I have seen you answer several questions on open forums about this kind of thing so I thought I would ask you about my situation. I manage a select 13u baseball team. We recently completed our year with a little money left in the account. Most parents have just said keep the money for next year but I have one that is demanding money. I am willing to refund some but this certain parent wants more than he is entitled to receive. He says my money figures don't add up and he should get more money. I have a DBA account set up for the team under my name. I am not tax exempt nor have a 501c3. At the first of the year each parent paid a team fee to cover uniforms, equipment, insurance, etc. I also told parents that we would have 2 fundraisers (raffle and bowling tournament). Each parent had a target number of tickets to sell and understood they must participate in the bowling event or pay 120.00 opt out fee. That would allow us to meet our goals for the year money wise. We set out a schedule of tournaments to be played and field rental costs that the raffle and bowling would cover. I had told the parents if everything went right the bowling would be to cover a world series in Colorado at the end of the year. Well, the year went to crap as we had parents not sell all of their tickets and only a few show up to bowl. So financially that put us in a bind to complete the year. So we ended up playing fewer tournaments than planned and didnt have all practices either. Being that there were so many shortfalls in fundraising we only had enough money to complete an abreviated season. I have one parent that just doesn't get that. He first sent me an email that my figures I have given him didn't add up because we only played 7 tournaments. He was wrong because we played 10 tournaments and when I brought that to his attention he said he didn't care about numbers anymore that I should just give him the 120.00 back because the bowling was for Colorado and we didn't go. That he didn't care that we didn't sell enough tickets or have enough bowlers he just wanted 120.00 back. I have offered him 70.00 which was his share of the money left in the account. I have been told that if I am keeping the team and keeping the account open until next spring that no money should be refunded to anyone. The money should be used for next year and if they choose to not play than they forfiet that money to the team. Which I will not have him back. He has threatened to file a complaint with the IRS and take legal action against me. He said I need to provide receipts, personal information, bank acct number etc to him so he can file a complaint. I do not wish to give him any of this, what are my rights? Is there anything the IRS can do?
Thanks so much in advance for any help you can provide,
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. Your question relates to something else but I will help you. The first effort you should make is to find out what the agreement was between you and the families as to the original payments and refunds. It appears you did not put the agreements in writing and that would have been advisable.
However, as to your specific question, none of the families has a right to your financial records unless you already agreed, for example by a written membership agreement to provide such to them. He can certainly file a complaint with the IRS. Then the question is whether you have been evading any federal tax laws. I would not be able to answer that from what you wrote to me, but I can advise you that, as a dba, you would need to declare your operation as a business and report income on a Schedule C.
You did not ask, but I will inform you that states do not allow individuals like you to have raffles. Those are violations of the gambling laws. Most states, though, do have provision for 501(c)(3) organizations to have raffles.
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.