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Nonprofit Law/filing our Navy Softball Team as a 501 (c) (3)

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QUESTION: Just curious on if we would be eligible and if so what would i need to request to be recognized as 501(c)(3). We are a group of sailors stationed here in San Antonio, Texas and play for a Navy Softball team.

ANSWER: By "Navy Softball Team" are you referring to a group that is controlled by the Navy?  Or, in the alternative, is it a group of individual sailors who control their own team?  After you give me that information I will reply further. I am assuming more than 75% of the players have already attained to the age of 18.  Please confirm that, or correct me.

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: it is a team comprised of sailors stationed here and im the coach of the team and in charge of it. its a military league where each command has a team and is controlled by us as players. We are also going to be competing in off base tournaments as well but in doing so we are looking to find sponsors for our team to help cover some of the costs, we have some already interest in sponsoring us but was asked to send them a W9 form. Doing some research most places that would donate would require us to be a 501 (c)(3). also, everyone is above the age of 18 years old.

Answer
In 1999 the U.S. Tax Court in Wayne Baseball v. Commissioner denied 501(c)(3) organization exemption accenting the private benefits as primary, The players were collegiate-aged and older.
http://goo.gl/NzAvbk

The IRS has taken a position that "[a]n organization may
be educational within the meaning of IRC 501(c)(3) if it teaches
sports to youth or by being affiliated with an exempt educational
organization. Such educational organizations may also provide
facilities and equipment."
www.irs.gov/pub/irs-tege/eotopice87.pdf

That IRS internal memorandum refers to Rev. Rul. 80-215 which is
at: http://www.irs.gov/pub/irs-tege/rr80-215.pdf
In that Revenue Ruling's "Law and Analysis" area we see the
description of the general law
---Start of Excerpt--
Section 501 (c) (3) of the Code provides for the exemption from
federal income tax of organizations organized and operated
exclusively for charitable purposes.

Section 1.501 (c) (3)-1(d) (2) of the Income Tax Regulations
provides that the term "charitable" is used in section 501(c) (3)
of the Code in its generally accepted legal sense and includes the
advancement of education and the promotion of social welfare by
organizations designed to combat juvenile delinquency.

Trusts created for the purpose of promoting sports for children
have been upheld as charitable on the basis of either combatting
juvenile delinquency or advancing education. Restatement (Second)
Trusts (1959), section 374(n); IV Scott on Trusts (3d ed. 1967),
section 374-6A; Bogert, Trusts and Trustees (2d ed. 1964), section
379.
---End of Excerpt--

There is no category of 501(c)(3) organization for adults playing a sport. It appears you are referring to a social club and social clubs do not qualify for 501(c)(3) organization status.  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

Donations to c7 organizations are not deductible to the donors.  However, if you offer to give some advertisement to the sponsors, they can often deduct the money that they give to your organization as a business advertising expense.  For example, you would put a banner on the fence at the field where you play thanking them and giving their address.

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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