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Nonprofit Law/What paperwork do I use


We are putting on our first ever benefit concert fundraiser for a 501(c)(3) organization. We have several artists that we are paying, who should fill out a W-9 or a 1099, because we used a third party to book the talent for us.

It appears that a 501(c)(3) organization is going to be directly paying music artists for their services. Those people would not be employees because of several reasons, mostly that you do not control the way they perform their services.  Therefore, they are treated as independent contractors and you would, then issue form 1099-Misc if the annual payments to each person is more than $600. For details see which is the IRS' instructions for form 1099-Misc and the title is "Instructions for Form 1099-MISC Miscellaneous Income".  

There are many factors that the IRS uses to conclude whether
someone is an employee or an independent contractor and the
nonprofit corporation's treatment of someone as an independent
contractor instead as an employee for tax purposes may be
incorrect and subject the nonprofit organization to taxes and
penalties. For the factors the IRS considers, see (down about 10 lines to "Common Law Rules")
but the IRS writes below:

--- Start of Excerpt ---
There is no "magic" or set number of factors that "makes" the
worker an employee or an independent contractor, and no one
factor stands alone in making this determination. Also, factors
which are relevant in one situation may not be relevant in
another. The keys are to look at the entire relationship,
consider the degree or extent of the right to direct and control,
and finally, to document each of the factors used in coming up
with the determination.
--- End of Excerpt ---

If you are paying the third party booking agency, however, you would only then file a 1099-Misc with that agency as the payee (and only if the total annual amounts paid to that agency is more than $600 annually.

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. 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


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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