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Nonprofit Law/501c3 required volunteer hours

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Question
Thank you for responding to my question so quickly.  Either I am not understanding your answer or I didn't ask the right question.  I am helping to rewrite our club handbook and i was under the impression that we jeopardize our tax exempt status by requiring parents to volunteer.  I have met some resistance when I recommended that we change the wording to strongly encourage rather than require volunteer hours.  Does the club jeopardize its tax exempt status if they require parents to "volunteer" at some of the events?

Answer
No. A 501(c)(3) organization that is engaged in providing services to members may require work from the member families as part of the exchange for the services that the organization renders to the family.  But such work is taxable and the organization will need to complete all tax forms as are required by employers. The IRS Publication 15-B discusses fringe benefits and is available
at http://www.irs.gov/pub/irs-pdf/p15b.pdf
As the IRS writes at:
http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf on page 74
(it generally takes a while to load as it is a 91 page pdf file):
--start of excerpt  ---
The use of the term "volunteer" generally has no significance in
applying the tax law....
A volunteer is an employee if an entity has the right to direct
and control the volunteer's performance, not only as to the results
to be accomplished, but also as to the methods by which the results
are accomplished.  It is the "right" to control, even if the entity
does not exercise the right, that is important. Many factors in an
employment relationship have to be considered before a decision can
be made as to whether the entity has the right to direct and
control.
---End of Excerpt---

You will see in that publication that most benefits given in exchange for work are taxable as "fringe benefits" under employment tax law.

Note that, if the organization has its exemption based upon it being charitable (and not educational) then it would not be able to base its grants and anyone being a member of the organization. Such an operation would be what the IRS calls a cooperative.  A cooperative is not qualified as a 501(c)(3) organization.  A 501(c)(3) booster organization is to be a charitable, not a cooperative, organization. A charitable organization, like the Red
Cross, does not require beneficiaries to work for the Red Cross in order to receive benefits.

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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