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Nonprofit Law/EIN for unincorporated youth sports group

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QUESTION: My daughter's soccer team is starting to fundraise to pay for tournaments and upgraded fields for practice.  I would like to open a bank account for the team and can apply for an EIN and register with the state of ohio as an unincorporated association. We looked into registering as a nonprofit with the federal government, but didn't want to pay the $400 filing fee.  I am wondering if we will have to file a tax return and pay any fees other than fees for the EIN and the ohio registration?  Its a nonprofit in that we take money in from fundraising and apply it to tournament fees and field rentals, so no income actually goes to any of the players or parents.  Thanks!

ANSWER: There are no fees to apply for and be given an EIN. But, if by "fundraising" you are referring to sales of goods or services, that is taxable to the recipient as normal income. Simply that the benefits are not going to an individual but a team does not change the taxability.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

---------- FOLLOW-UP ----------

QUESTION: Thank you for your quick response.  Most of our fundraising will be things like fundraising calendars (where we get donations for the prizes and people buy a ticket to win), football squares, wing night, and a golf outing.  Would earnings from these things be taxable income?

Answer
Yes, the IRS and the courts are quite expansive in what they consider to be taxable income. A gift is not taxable to the recipient generally, but those transactions do not appear to be gifts to your people. See http://goo.gl/9wKubE "Commissioner v. Duberstein", 363 US 278 - Supreme Court 1960.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

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Harvey Mechanic

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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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