Nonprofit Law/Class Reunion?

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Question
Mr. Mechanic - I went back on all your 2015 posts and could not find any current answers related to my questions, and want to make sure laws haven't changed for 2015/2016, and I really want to make sure I am understanding everything correctly/proceeding forward the best way possible.

My main goal is to open a bank account for my Class Reunion. I know I have to get a EIN, because I do not want it associated with me on a personal level. However, I am overwhelmed with the information that has been provided by you and on other sites. We are a smaller class of 245, but in getting quotes for local venues - we are looking at potentially charging $35-$45/person for the evening. Worst case scenario (highly unlikely, but it would be just my luck) if everyone shows, and everyone brings a guest - I am looking at depositing $17k - $22.5k just in tickets for the evening (which I definitely do not want associated with my SSN come tax time).

On the IRS site - there are a few options for the "Tax-Exempt Type", which of the following would be most appropriate in the eyes of the IRS: Community or Volunteer Group? PTO/PTA or School Organization? Social or Savings Club? Other Non-Profit/Tax Exempt Organizations? I would think one of the last two, but I am not sure which is best for my given scenario?

Obviously, we will be overcharging each person by a little to cover incidentals that may arise, future mailings, the cost over the next 5-years to maintain our class reunion website, etc - would the IRS allow for this type of situation?

I really appreciate any light you can shine on my subject and truly appreciate you sharing your knowledge with myself and others.

Answer
"Social or Savings Club" is the appropriate category as class reunion groups are mostly considered to be for social purposes and would not qualify, for example as a 501(c)(3) organization which needs to have mostly charitable, religious or educational activities.

It is fine to maintain some surplus in the relatively small amounts that you want to maintain, but unless you qualify as a IRC 501(c)(7) organization, your annual profit would be taxable.  IRC 501(c)(7) exempts from federal income tax, clubs "organized for pleasure, recreation, and other nonprofitable purposes, substantially all of the activities of which are for such purposes and no part of the net earnings of which inures to the benefit of any private shareholder."
http://www.irs.gov/irm/part7/irm_07-025-007.html

Therefore, I strongly recommend that your group organizes as a unicorporated nonprofit organization, nonprofit trust, or nonprofit corporation in your state and then it would be able to qualify for exemption with the IRS. I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. Your issues are beyond those as they refer to a nonprofit social group. If you want to hire me to assist in the set-up, then, send me an email directly to my email address below and I will quote you my fees.

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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