The internal revenue service would exempt booster clubs along with other non-profit organizations from paying taxes. However, they would be required to register as 501c3 organizations. Without the exemption offered by State Rules for Creating Booster Clubs, it could owe approximately 15-25 per cent of their yearly income in taxes.
However, the exemption would have considerable implications. The IRS would need booster clubs for distributing funds equally to all kinds of students pertaining to their individual participation in various kinds of fundraising activities. The question to ponder upon would be whether it is beneficial for a booster club to get registered with IRS as 501c3. Would it come under State Rules for Creating Booster Clubs?
Role of Booster Organizations
Booster organizations should make the most of the tax-exemption offered by State Rules for Creating Booster Clubs. The IRS recommends registering under section 501(c) (3). The top financial priority of booster leader would be to operate in full compliance with guidelines provided by the IRS.
Find below few essential State Laws Regarding Booster Clubs.
- Operating with Single General Fund: It would be an essential requirement that all income should be deposited in the fund and all expenses paid from it.
- Not to keep Records on the Side: You should be wary of keeping records to provide the appearance of special benefits provided to students. The records should be inclusive of the number of hours students worked in fundraisers, credit for dollars that students brought to the organization or points awarded for student’s participation in fundraisers.
- Keeping Records of Sound Accounting Practices: Several families would make student payments to organizations under several funding models. Therefore, you should keep records of all deposited and withdrawal of funds. The State Laws Regarding Booster Clubs does not encourage these records to be used for giving preferential treatment to any student.
- Seeking Legal Counsel: If you were in doubt, you look forward to seeking legal opinion for helping you determine the appropriate course of action. However, you should be sure to choose an attorney specializing in nonprofit operations.
It would be pertinent that your booster body should be in compliance with State Laws Regarding Booster Clubs. You should be confident that your booster club should be abiding by the rules stipulated by the IRS. You should fare well in event of the IRS audits your booster club. You should be well equipped with IRS requisites for your booster club.