High School Booster Club

[Kamden]

I've been asked to start a booster club for our high school track team and to open a checking account.  I obtained an EIN number on-line for "banking purposes only", but I think I checked the box that is was a non-profit organization.  We will most likely take in much less than $5k/year...so even though we won't be pursuing a 501c3 status, are we still considered non-profit?  I can still solicit donations, but I must tell them they are NOT tax-deductible, correct?  Thank you.

ANSWER: You would need to inform people that donations to your organization are not tax deductible unless you have articles of incorporation that yours is a nonprofit corporation in your state or articles of association for a nonprofit unincorporated association. Harvey Mechanic Attorney At Law [email protected]

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I am unclear on something here...are you saying that if I am able to obtain Articles of Association for a nonprofit unincorporated association OR I incorporate at a nonprofit corporation, that I CAN tell people that their donations are tax deductible?  I thought that you had to have 501c3 status for donations to be "tax deductible".  Also, do I contact my Secretary of State for Articles of Association?  Thanks!

ANSWER: 501(c)(3) organization status is accepted by the IRS if the organization is set up properly, if it is not required by its size or otherwise to obtain a determination letter from the Internal Revenue Service that the organization is exempt under section 501(c)(3).  See instructions to Application for Exemption

www.irs.gov/pub/irs-pdf/i1023.pdf

in the right column on the first page under "From 1023 not

necessary" discusses who does not need to file and among those is

"Any organization that has gross receipts in each taxable year of

normally not more than $5,000."

Yes, you would contact the State for establishing your unincorporated nonprofit association. Your question is an issue of state law and the answer may differ in different states. However, if you give me your state I may be able to direct you. Harvey Mechanic Attorney At Law [email protected]

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Thank you - I am in the State of Georgia.  Just got off the phone with someone in the corporations area and she would only say "there is no such entity" when I inquired as to setting up an "unincorporated nonprofit association".

[Tyeis]

That agent was not well informed. Your club is already an unincorporated association but the question is whether it could register with the state.  You will see the term "unincorporated association in the following from the Georgia code:

14) 'Professional association' means a corporation or unincorporated association which at the time it initially makes application to form a fund under this chapter has been organized for a period of at least three years and is domiciled in the State of Georgia, is engaged in substantial activity for the benefit of its members, other than the sponsorship of a fund operated pursuant to this article, and is comprised of a bona fide group of employers who are engaged in the same or in substantially similar types of professions and have similar governing industry classifications as approved by the Commissioner regarding workers´ compensation and employers´ liability insurance. http://law.justia.com/georgia/codes/34/34-9-151.html

Also see the article athttp://tinyurl.com/24plfc

which is by a Georgia Attorney about Georiga unincorporated associations. Now, some states, like Texas have a procedure for unincorporated associations to file Articles of Association with the State.  Other states do not have such a procedure, but would only require a filing(usually at the county level which is called a dba or fictious business name filing).  Georgia appears to be one such state.

Therefore, you would follow the IRS guidelines which are discussed

in IRS Publication 557 "Tax Exempt Status for Your Organization"

www.irs.gov/pub/irs-pdf/p557.pdf

wherein at the right column at the top of page 3, "Articles of Association" are mentioned and they continue, " If the organization does not have an organizing document, it will not qualify for exempt

status."  The details then start on page 19 and your Articles of Assocation would need to have the required clauses as you see in the samples for other types of entities. Harvey Mechanic Attorney At Law [email protected]