Race Club officers- did you file for tax exempt status? Help!
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  1. #1
    flinty-eyed moderator
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    Question Race Club officers- did you file for tax exempt status? Help!

    If so, under what provision? With the current crack-down 501(c)(3) status seems out of the questions, especially with the restrictions on benefits to members.

    I looked at 501(c)(7) but the restriction on 35% of gross revenues or less from non-members (which would be hard as most clubs depend on sponsors and race revenues) seems to restrict that.

    What are other clubs doing with regards to tax status? Are there resources for clubs at the USA Cycling level? Are clubs paying taxes? Or are they just ignoring the issue and hoping it goes away?

    Thanks!
    Dr. Cox: Lady, people aren't chocolates. Do you know what they are mostly? Bastards. Bastard-coated bastards with bastard fillings. But I don't find them half as annoying as I find naive bubble-headed optimists who walk around vomiting sunshine.

  2. #2
    Clyde-o-Matic
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    Bump - I just got stuck with treasury duties at our club where we historically have ignored any tax consequences to us or our sponsors. Anybody else care to share how their organization is organized?

  3. #3
    RoadBikeReview Member
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    Here's what we do, not saying it's optimal, but I think we're legal.

    The club is incorporated at the state level as a non-profit. However we did not file for IRS tax exempt status. If we had, i would have gone for c(3), the amatuer athletic association part. However, the filing fee is $750...and I can pay a lot of tax for that. Basically, we attempt to spend all our sponsorship dollars within the year. I've had $100-$300 in "profit" that we paid taxes on over the last couple of years. I filed an 1120. If your receipts are less than some threshold, you don't have to fill out the sched m-1s or the balance sheet. It wasn't too bad. and of course a state return.

    We do not present ourselves as a non-profit cause to our sponsors. We present our kits as adveristing space and expect that our sponsors deduct the cost as marketing/advertising, NOT a donation.

  4. #4
    RoadBikeReview Member
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    Quote Originally Posted by litespeedchick
    ..........
    The club is incorporated at the state level as a non-profit. ........ Basically, we attempt to spend all our sponsorship dollars within the year. ........
    We do not present ourselves as a non-profit cause to our sponsors. We present our kits as adveristing space and expect that our sponsors deduct the cost as marketing/advertising, NOT a donation.
    I've done some research for "bike clubs" and/or "bike teams" and came up with exactly the same answers.

    Depending on the state (and I'm not a lawyer), you may get some liability protection by being incorporated as a non-profit. That could be very meaningful.

    I can't imagine an amateur bike team making a profit.

    And your sponsors ARE paying for advertising.

    So spend the $$ and there is no profit to tax.

  5. #5
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    clubs can qualify as "social clubs" under 501(c)(7). You need not state a charitable purpose. The requirements are that the proceeds be spent for the benefit of members, with no one taking profit. Spend it on your kit, your annual banquet, race fees, whatever.
    Sponsorship dollars are not deductible as charitable donations, although most businesses deduct them as what they are -- advertising. Individual contributions are not deductible.
    See, also:

    http://www.irs.gov/charities/nonprof...=96189,00.html

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