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Manager on a little league team asks for donations from businesses to raise money for trophy party. We sell tickets for drawing and give away all donated prizes. Donations are products from the from their company - tickets, passes, etc. to their establishments. Monies collected from drawing pay for all kids trophies, parent participation awards, and all the food, and left over monies is then donated back to the little league either by purchasing, i.e., barbeque or bat holders for the dugout.

Some donators ask for a 501(3)(c). We do not keep track of donated items. This year I am a board member to the little league.

Will this effect/jeopardize the little leagues taxes or 501(3)(c) status?

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Your question is hard to understand. Are you asking about whether your little league team should acquire 501c3 status? If so - this really off-topic here, and you should talk to a tax professional (EA/CPA/Attorney licensed in your state). –  littleadv Mar 2 at 19:34

1 Answer 1

The good news is that your parent organization is tax exempt and your local organization might be.

The national organization even has guidelines and even more details.

Regarding donations they have this to say:

Please note: The law requires charities to furnish disclosure statements to donors for such quid pro quo donations in excess of $75.00.

A quid pro quo contribution is a payment made partly as a contribution and partly for goods or services provided to the donor by the charity. An example of a quid pro quo contribution is when the donor gives a charity $100.00 in consideration for a concert ticket valued at $40.00. In this example, $60.00 would be deductible because the donor’s payment (quid pro quo contribution) exceeds $75.00. The disclosure statement must be furnished even though the deductible amount does not exceed $75.00.

Regarding taxes:

Leagues included under our group exemption number are responsible for their own tax filings with the I.R.S. Leagues must file Form 990 EZ with Schedule A if gross receipts are in excess of $50,000 but less than $200,000.

Similar rules also apply to other youth organizations such as scouts, swim teams, or other youth sports.

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+1 great answer –  GµårÐïåñ Mar 2 at 20:08
    
Right, the key thing you state is that OP must offer the letter confirming the donation. His comment "We do not keep track of donated items" simply means they are not following what's required. No offense to OP, but my 15 year old knew to track the donations she collected for a fundraiser, and the organization gave her a form letter so she could fill in the details and provide to the businesses. –  JoeTaxpayer Mar 2 at 20:12

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