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Need Tax Id for my club - Cross post(12 posts)

Need Tax Id for my club - Cross posttriple shot espresso
Dec 17, 2003 3:03 PM
How do I get a tax id for my club so I can open a bank account? There's a bunch of types of ids, is it possible to get one for a club that makes money that sponsors give us tax deductible.

Sorry for the cross post from the race board I just need a fast answer.
re: Need Tax Id for my club - Cross postwily in pacifica
Dec 17, 2003 4:03 PM
Any club can get a tax ID#. There is a form (SS-4) to fill out. You used to, and maybe you still can, just call the number on the instructionsto get an ID# over the phone. The IRS will then send you an official letter confirming the ID#.

Check the IRS web site for this info, forms and form instructions.

If you want to get all offical you should get the club incorporated. I know this sounds like way to much work for a club but it will shield the directors of liabilites and allow you future benefits like charitable status.

I am the Treasure of a Bay Area Tri CLub. I am a tax CPA and a buddy is an Atty. Between the two of us we got the club,

By-Laws - Atty did this and I think they are fairly generic.

Articles of Incorporation - Same as above

Tax ID# - I did this over the phone

Open checking account and order checks, etc. I did this

File tax forms with the IRS to be recognized as a Tax Exempt 501c3 charitable organization. I did this and it is a bit tricky. Not to be a tax exempt org but to go the next step and be considered a charitable org. There are big bene's to being a charitable org such as corporate donations. Lots of corps have a policy to give to 501c3's only so we fit in there and get a few good bene's. Plus the members dues are tax deductible to the members on thier individual tax returns.

If you plan to order and sell clothing, and your state has a sales tax, then you will need to get a resale cert. I did this and it is not a big deal. Just took my lunch hour.

I have offered to help other tri clubs in this process but noone ever took me up on it. I believe with the paperwork we have you would be 80% there just by changing a name and address here and there.

We have genaric By-Laws, Articles of Inc, and the IRS forms would just need a bit of editing.

Let me know if you are planning to go thru with this and I may be able to help.

What state are you in?

Willy in Pacifica, CPA
I need your helpmexican-JUMPING-frijoles
Dec 17, 2003 4:32 PM
Wily,

My club, same club as Humane G Nome, is trying to get this set up. Any change you could give us a hand?

MJF
I need your helpwily in pacifica
Dec 17, 2003 4:40 PM
I was just reading another post from G and realized you guys are in the Bay Area, correct? If so then that would make it much easier.

As a matter of fact i have been on a few of the City Cycle rides but none lately as we just had Personal Exemption #3 3 months ago.

Between the personal exemption and the Child tax credit it comes out to a really nice bike.

Sure I would be happy to help out. My atty buddy would most likely love to help as well except his mother just past away a few days ago. But most of his paperwork I have in a word doc so we could get started easy enough.

As you know I live in Pacifica but work in the Financial District so perhaps we could meet for lunch or a weekend ride.

I was going to ride with CC on Sat but may end up riding with other forum folks who want to ride the peninsula. probablay 92/Canada and up a hill or two.

Willy in Pacifica
wjjg@juno.com
415 284-8715
re: Need Tax Id for my club - Cross postmexican-JUMPING-frijoles
Dec 17, 2003 4:35 PM
Could you please email me:

javier underscore mxl at yahoo dot com

THANKS!
Great info - thankstriple shot espresso
Dec 17, 2003 4:47 PM
I'm considering the incorporation thing. Can you send me an email so I can contact you when a decision is made and I can get thus forms from you?

Thanks again,
TSE

email webmaster@haulnass.com
Great info - thankswily in pacifica
Dec 17, 2003 4:59 PM
Triple,

See my post above for my home e-mail and work phone number.

Willy in Pacifica
re: 501(c)3 CharityKeeping up with Junior
Dec 18, 2003 5:57 AM
Willy is right that you need to do this step if you want contributions to be elegible for deduction as charitable contributions for tax purposes.

Depending on your major sponsors 501(c)3 qaulification may not be necessary. Most businesses that sponsor you would get a better tax deduction treating their sponsorship as advertising. Basically that is what they are doing, just like all the logos on NASCAR.

501(c)3 could be important with some larger corporations that may have a special budget item for charitable contributions that is easier to get money out of. Also if you have a number of indivuals (non-advertisers) who sponsor you.
re: 501(c)3 CharitypedalAZ
Dec 18, 2003 9:28 AM
While businesses can expense sponsorship support as advertising, contributions by individuals would not be deductible unless the entity is a 501(c)3, so it would still be good to have, if someone can be relied on to keep the paper work in order.

If the use of the funds is solely to benefit the members (e.g., paying for club event expenses, maintaining a web site, mailing flyers) it really doesn't qualify as a 501(c)3, but should file as a 501(c)7 social club, which pays little or no tax unless and until its non-member revenues exceeed 15% of total revenues. Dues paid to 501(c)7's are not deductible, and, technically, dues to 501(c)3's are not necessarily (fully) deductible, either, if the member gets value in return equal to the dues, such as meals, swag, etc.
re: 501(c)3 Charitywily in pacifica
Dec 18, 2003 11:26 AM
PedalAZ

The paperwork needed for a 501c3 is no different that that needed for any entity really. Paperwork is paperwork.

When we set up our club I assumed it would be a 501c7 until I did a bit of research and found out we could qualify as a 501c3 and our members get the deduction on their returns.

You may have a few limitations but not much different unless you were planning to take advantage of the charitable status.

For instance, you cannot donate $3,000 to the club, take a deduction, then have the club buy you a new bike. But if you are forming the club for compitition and to promote the sport of cycling in the US and Worldwide then you can qualify.

Similar to something like the US Ski Team. Anyone can donate to our club without being a member. Noone does but that does not matter.

But by being a 501c3 over a 501c7 we have received discounts on products, been given items for free and given discounts on intangibles like booth space at races.
For instance, one of our memebrs works for a food distributor. Because we could prove we are a 501c3 they donated a lot of food for us to take down to Wildflower for the Triathlon. Since Wildflower is a camping weekend we sold coupons to members for their weekend meals, rented cooking equipment and paid for a rental van to get everything down there. One of the members is a chef and he whipped up all the meals. The clubs around us were very jealous. We try to make it so we break even on most of these type of things or make a bit of a profit to pay for the track coach or give discounts on other items like unis.

Also we, the club, can collect money for a worthy 501c3 entity like "Team in Training" or "bikes for kids". Those that make their checks out to us get the deduction then we can present a big check in the name of our club to the org rather than each individual sending in a check. We hav put on "Dating in the Fast Lane" for the single members in the name of Team in Training and then sent the proceeds to them. You can think of very creative ways to raise funds for worthy causes and the only diference is that it goes thru us forst and we get some recognition. Plus we can usually pull things together easier being a club of about 300.

Busineses can expense anything they pay out for if it is a reasonable business expense. So if they want to call if advertising or charitable contribution it is up to them and their accounting dept. But I believe some companies have a policy about things like the food example above where we would not have gotten the food if we were not a 501c3.

Willy in Pacifica
I agreepedalAZ
Dec 18, 2003 12:59 PM
The benefits of running it as a 501(c)3 can be very attractive, but the paperwork is required. To establish and maintain the 501(c)3 status requires much more diligence than an informal club that doesn't file at all, get a tax ID, etc. Between 501(c)3 and 501(c)7, sure, it's the same effort.

The 501(c)3 stil needs to be careful in claiming that regular member dues are fully deductible. For example, I ran a 501(c)3 swim club. Monthly swim dues were not deductible, because the members were entitled to services with value equal to that amount, but contributions over and above that were deductible.
I agreewily in pacifica
Dec 18, 2003 1:33 PM
AZ,

I agree with your swim club example. With the tri club they are not really getting anything in return for their $50-$65 annual membership other than to be a member. This does allow them to come to club only functions and you must be a member to be involved with the track sessions, etc. The track sessions are an additional fee.

I guess the advanges to being in the club is for discounts, and to meet others. You also must be a member to buy a uniform. The annual fees go to keeping the costs down on other programs, putting on a couple of parties, club insurance, bike boxes, and G&A type of expenses. Our biggest expense is our track coach who charges $175 per week. Members pay an additional fee to take part in the track sessions and we try to break even on this. We usually lose a bit each year. But track is a big selling point and we have an Olympic Trials Marathon Qualifier as our coach.

But I don't think I would be doing anything different, paperwork wise, if we were only a 501c7-club. Even a 501c7 needs a tax ID and must do all the same filing with the IRS with just a little less details. But things like Sales certificate, insurance, national affiliation expenses are all identicle.

I just don't want anyone to think it is that much different geting to be a 501c3. It is well worth the little bit of extra effort up front when everyone is all gung ho about getting everything together.

It is the established, non-entity clubs that stay away from doing anything official since they have been an informal club for so long.

The best time to set everything up is right from the start. That is when everyone has the energy to follow thru with things.

Willy in Pacifica