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Nonprofit Law/Booster Board Members


We have a school booster club 501(c)(3) it is faily new. I am concerned about how legal aspects of or board members (5) total.
3 of the 5 work for  the school system itself
2 are married (1)of them works for school system
I didn't think the board members were supposed to have a business relationship with the booster itself muchless be releated. Not sure what to do
is filling taxes mandatory?

The board members are not supposed to have a personal financial interest in any transactions.  I am assuming that the school system is a regular public school system and, therefore, it is treated by the IRS as an exempt organization.  The IRS does not consider representatives of an exempt organization on the board of another would be a problem, because the school system is exempt.  Now, if there school system was for-profit then there would be prohibited conflict of interest issue and inurement issue.

The IRS has published at
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Where an exempt organization engages in a transaction with an insider and there is a purpose to benefit the insider rather than the organization, inurement occurs even though the transaction ultimately proves profitable for the exempt organization. The test is not ultimate profit or loss but whether, at every stage of the transaction, those controlling the organization guarded its interests and dealt with related parties at arm's-length.
---End of Excerpt--

If by asking about "filing taxes" you are asking whether the 501(c)(3) booster organization is required to file something with the IRS. Links to Latest Published Form 990 Series Forms and Instructions
are available at which explains which 990 series return to file.

If you are also interested in knowing whether the booster organization is required to file with the IRS an Application for Exemptio -  See the IRS Publication 557 "Tax Exempt Status for Your Organization" at 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 section 501(c)(3)."

My summary of IRS regulations relating to 501(c)(3) booster organizations is at and you may be interested to read that.

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.

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. 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 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 "" without the quotes and then add your search terms before hitting enter.


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.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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