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IMPORTANT POSSIBLE TAX BENEFITS FOR VOLUNTEERS!
The information attached below was provided as part of a presentation by a representative from the IRS. Tho some of the Q&A's may seem "obvious," they are all "real" questions that have been brought to the IRS.
Volunteers who itemize deductions for their taxes can benefit from keeping a pocket calendar in their vehicle and documenting mileage to and from any activity related specifically to a non-profit/charitable organization. This includes managers, coaches, volunteer umpires, concession stand workers, board members, etc. If travel to a meeting, game, "event," picking up gear, office supplies, etc. is SPECIFIC to the non-profit, the mileage can be included in the write-off total. Mileage must be specific to the non-profit ... and cannot include errands run to the grocery store or other such "personal ventures" on the way to or from the non-profit event.
Meals can only be used as a write-off if the volunteer event takes you away from home overnight.
Volunteer umpires who purchase their own umpire equipment for use in games for the non-profit charitable organization, can write off the cost of the equipment.
Long Distance phone calls can be written off as long as they are documented related to the non-profit organization. The cost of an additional telephone line (or the cost of equipment used to allow one line to be used as two) for a computer or facsimile equipment is not an eligible write-off.
If the non-profit organization is reimbursing a volunteer for any out-of-pocket expense, complete and detailed documention should be maintained in the organization's file to include receipts and explanation of the expense.
If you have other questions arise, send me an e-mail and I will obtain answers through my contacts. Feel free to share this information with your local league staff and your pool of volunteers (managers, coaches, umpires, etc.).
Hopefully many folks will be able to benefit from documenting some of their volunteer activities! Raleen, D9
----- Original Message -----
Sent: Wednesday, March 10, 2004 10:06 PM
Subject: Charitable Donations
Q. I am paid $35.00 per game to umpire high school ball. When I volunteer to umpire a Little League game I claim a $35.00 deduction because that is fair compensation for my time.
A. No, you can not claim the value of your time.
Q. After each game I buy a hot dog and a soda for each of my players. I pay by check and claim this as a charitable deduction.
A. No, the benefit is to an individual and not a charitable organization.
Q. Many Little League meetings are held at restaurants. I deduction the cost of the meals I purchase.
A. Meals are not deductible unless you are away from home overnight and the meal is directly related to the charitable organization business.
Q. I have three kids playing on three different teams. I claim the miles I drive taking them to games and practices as charitable deduction.
A. This mileage is personal. The benefit is for your children not the organization.
Q. I pick up the food for the concession stand in my own car. I claim the miles as charitable deduction.
A. Correct as the mileage is specific to the charitable organization; be sure to keep records.
Q. I am a volunteer umpire. I claim the cost of my uniform and gear as a charitable deduction.
A. As long as the items can not be converted to personal use. If clothing can be worn away from umpiring, then it is not deductible.
Q. I am a manager. I purchased a sweatshirt and a jacket with my team's logo on them. Since Little League is a non-profit organization I claim them as a charitable contribution.
A. No, personal clothing is not deductible when it can be worn elsewhere.
Q. I donated my old lawn mower to Little League. I claimed a charitable deduction equal to what I paid for the mower when I bought it.
A. The deduction is limited to the fair market value, not replacement cost and not what you purchased for. What is a buyer willing to pay for it? Average garage sale price is a good judge of price.
Q. My children attend many clinics to improve their skills. I claim the cost as an educational expense.
A. Education expenses are not allowed baseball/softball-related activities. Education credits are available to college expenses only.
An additional Note:
Sent: Monday, November 07, 2005 6:49 PM
Subject: RE: Registration Expenses for attending Little League Leadership Training State Conference
Raleen,
Most leagues pay their volunteer�s registration if there is a registration fee .... For a volunteer to pay their own way, yes, it could be tax deductible, depending on their personal tax situation. If they can deduct it, the deduction is only worth about 25% of their cost. Where if the league pays their registration fee, it�s fully refunded (by the league that is 'covering their cost.') Mileage to/from these events need to be documented for use by those who use deductions (i.e. volunteer mileage).
Tuesday, February 20
LEGAL BULLETIN REGARDING TAX EXEMPTION INFO AND LITTLE LEAGUE
LITTLE LEAGUE BASEBALL, INCORPORATED
LEGAL BULLETIN
WILLIAMSPORT, PENNSYLVANIA
TAX EXEMPTION
HEADQUARTERS
Little League Baseball, Incorporated (Little League International) has been declared exempt from taxation by notification from the Deputy Commissioner of the Internal Revenue Service.
LOCAL LITTLE LEAGUES
The following are some general guides of the taxability of local league income and the deductibility of contributions given to them.
While Little League Baseball, Incorporated, has been qualified as an exempt organization, therefore, its income is exempt and contributions to it may be deducted, such exemption does NOT cover any of the chartered leagues. Each chartered league must separately qualify for its own tax exempt status, either directly on their own through the I.R.S., or by applying to be included under Little League Baseball’s federal group exemption number. Either option is available to the league, but it is recommended that the group tax exemption through Little League Baseball, Incorporated, be used as it brings additional benefits of efficiency at no cost to the local Little League. Exemption may be had under Section 501(c)(3) of the IRS tax code which exempts from taxation “corporations . . . organized and operated exclusively for . . . education purposes . . . no part of the net earnings of which inures to the benefit of any private shareholder or individual . . . no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which does not participate in (including the publishing or distributing of statements) any political campaign on behalf of any candidate for public office.” While neither the statute nor the regulations precisely define what is meant by a “corporation . . . organized and operated exclusively for . . . education purposes . . .”, the regulations, Section 501(c)(3), define “educational” as “instruction or training of the individual for the purpose of improving or developing his capabilities.”
The following instructions refer to those leagues that choose to become included under our group number. In order for a local chartered Little League program in good standing to qualify under Little League Baseball’s federal group tax exemption, the following procedural requirements as specified by the Internal Revenue Service must be made (NOTE: As of 2006, all leagues in Oregon District 9 have been approved for inclusion in Little League's Federal Exempt Group ID # 3158):
1. A local league must be affiliated by charter with Little League Baseball, Incorporated, and subject to its general supervision.
2. A league adopts the same fiscal year as Little League Baseball, Incorporated, which is October 1 through September 30. The league also must submit an annual financial statement showing income and expenses to Little League Baseball, Incorporated, as referenced to in the Little League Operating Manual under “Local League Accounting Procedure.”
3. Provide to Little League Baseball Headquarters in Williamsport, PA, their League I.D. Number as well as the league’s federal Employer Identification Number (E.I.N.) issued to them by the Internal Revenue Service. If the league does not have an E.I.N., it can apply for one through the I.R.S. using an SS-4 Form available from the I.R.S. or on their website: IRS.gov.
4. Little League federal group tax exemption for a chartered league is not automatic. It has to be applied for by submitting a Letter of Intent completed by the league president. Once the Letter of Intent is received and processed by Little League Headquarters, the league is added to our database and a confirmation letter along with a Letter of Determination from the I.R.S. is provided to the local league. These two documents must be kept together and presented upon request to any donors, sponsors or other entities in regard to charitable contributions. Leagues included under our group exemption number are responsible for their own tax filings with the I.R.S. For Little Leagues with gross receipts in excess of $25,000.00 but under $100,000.00, IRS Form 990-EZ with Schedule A should be filed with the IRS by deadline February 15th. For Little Leagues with gross receipts in excess of $100,000.00, Form 990 with Schedule A should be filed with the IRS by deadline February 15th. The law imposes a penalty of $20.00 a day, up to a maximum of $10,000.00, when a return is filed late unless there is a reasonable cause for delay. Gross receipts include contributions, gifts, and grants from the public directly, sponsor fees, registration fees, membership dues and assessments, fund raising and other income. Each Little League is required to include their League I.D. Number, Employer Identification Number and current name and address of the league president on each tax return. Each Little League is considered a separate entity and, therefore, the IRS assigns a separate Employer Identification Number for each league (even though some leagues elect officers under multiple management to cover more than one league). Each Little League is required to file a separate tax return. If there are any changes to the assigned Employer Identification Number (E.I.N.) for your league, a written notification must be submitted to Little League Baseball International to update the database to be in compliance with IRS regulations.
CHARITABLE CONTRIBUTIONS/SUBSTANTIATION DISCLOSURE REQUIREMENTS
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. The responsibility for obtaining this substantiation lies with the donor, who must request it from the charity.
Charities and donors should be prepared to provide/obtain the described substantiation for contributions of $250.00 or more. Little League Baseball Headquarters recommends that all donations received by local leagues under the Internal Revenue Service 501(c)(3) code be given a receipt in the amount of the contribution. In the instance of donation other than by cash or check, i.e., a popcorn machine for the concession stand, the donor should include an estimate.
The league in providing an acknowledgment and/or receipts should state donor’s estimate and the amount. If you have any questions or comments concerning your league tax exempt status, please contact us.
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