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501c3 Required Volunteer Hours

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501c3 Required Volunteer Hours

Postby Alin » Mon Mar 13, 2017 2:57 am

Thank you for responding to my question so quickly.  Either I am not understanding your answer or I didn't ask the right question.  I am helping to rewrite our club handbook and i was under the impression that we jeopardize our tax exempt status by requiring parents to volunteer.  I have met some resistance when I recommended that we change the wording to strongly encourage rather than require volunteer hours.  Does the club jeopardize its tax exempt status if they require parents to "volunteer" at some of the events?
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501c3 Required Volunteer Hours

Postby milo » Mon Mar 13, 2017 5:38 am

No. A 501(c)(3) organization that is engaged in providing services to members may require work from the member families as part of the exchange for the services that the organization renders to the family.  But such work is taxable and the organization will need to complete all tax forms as are required by employers. The IRS Publication 15-B discusses fringe benefits and is available

at http://www.irs.gov/pub/irs-pdf/p15b.pdf

As the IRS writes at:http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf on page 74

(it generally takes a while to load as it is a 91 page pdf file):

--start of excerpt  ---

The use of the term "volunteer" generally has no significance in

applying the tax law.... A volunteer is an employee if an entity has the right to direct

and control the volunteer's performance, not only as to the results

to be accomplished, but also as to the methods by which the results

are accomplished.  It is the "right" to control, even if the entity

does not exercise the right, that is important. Many factors in an

employment relationship have to be considered before a decision can

be made as to whether the entity has the right to direct and


---End of Excerpt---

You will see in that publication that most benefits given in exchange for work are taxable as "fringe benefits" under employment tax law.

Note that, if the organization has its exemption based upon it being charitable(and not educational) then it would not be able to base its grants and anyone being a member of the organization. Such an operation would be what the IRS calls a cooperative.  A cooperative is not qualified as a 501(c)(3) organization.  A 501(c)(3) booster organization is to be a charitable, not a cooperative, organization. A charitable organization, like the Red

Cross, does not require beneficiaries to work for the Red Cross in order to receive benefits. Harvey Mechanic

Attorney at Law [email protected]

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.
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