Nonprofit Law/EO Officers

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Question
We are a nonprofit organization 501©3 incorporated in the state of Florida.

The question to you is, if an officer (Secretary) is paid a fee for his services taking photos and videos for our fundraising events is considered “compensation” or “fees to an external contractor”? We have two events a year, so the total for a fiscal year will be less the $ 600 USD. This amount is comparable to the fees paid to third party contractors for same services. Would these $ 600.00 fees be reportable as W2 items and subject to FICA/FUTA/SS  withholdings? Or they would be considered as 1099 items and reportable as such.

Answer
The officer performing the duties as Secretary of a corporation is treated by the IRS as an employee. http://goo.gl/ypkKS But the same person, who person, when contracting with the corporation for services other than the duties of the office is treated as any other person who contracts with the corporation for those services.  Therefore, as the photographers such as you describe are ordinarily treated as independent contractors, the 501(c)(3) organization would not need to file form 1099-Misc (services less than a total of $600 per year.

The same person may receive both a W-2 and a 1099-Misc from the
same employer.  See pdf page 76 of that IRS Training Manual
---Start of Excerpt--
A worker may perform services for a single business in two or
more separate capacities. A dual status worker performs one  type
of service for a business as an independent contractor, but
performs a different type of service for the business as an
employee.
---End of Excerpt--
"IRS Internal Training: Employee/Independent Contractor" at
www.irs.gov/pub/irs-utl/emporind.pdf

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

Expertise

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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