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Nonprofit Law/Gymnastics Parent Associations

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Question
My daughter just joined a new competitive gym. I just received the contract by the Parent Association that is supposed to be a Non Profit organization and was very surprised to see that:

1- Membership to the gym requires that you be a member of the Association
2-There are personal accounts for which funds are placed in when individual gymnast fundraise
3- Every member is required to work a certain amount of sessions for the home meets. A penalty of $100 per session not worked will be assessed to the Memberís account if the family does not contribute time per the meet coordinatorís expectations (I thought this was a volunteer organization, how can they punish a parent for not volunteering their time?)
4-Failure to attend all scheduled meetings (with the exception of one excused absence), will result in a penalty of $10 per missed meeting
5-All Members are required to participate in general fundraising events as approved by the Executive Board and discussed at the general membership meetings (see minutes of meetings for details).  Monetary donations, as approved by the Executive Board, will be allowed in lieu of participation on an individual basis.

I am wondering if this is even legal from the IRS standpoint. I am being asked to sign a contract agreeing to everything listed above. Is there any information that I can read that will direct me to IRS documentation that goes against this?

Answer
I am assuming that the Parents Association wants or claims 501(c)(3) organization status.  If so, what they are trying to require is in violation of 501(c)(3) organization regulations. My summary of IRS regulations relating to 501c3 booster organizations is at: http://goo.gl/IdQwML and you may be interested to read that and let me know if you have any follow-up after you read that.

Note, that #1 indicates that the for-profit (I am assuming it is for-profit) gym is conspiring with the 501(c)(3) organization to evade federal income taxes.

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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