Booster Club Tax Filing and Compliance Newsletter

Most booster club members are enthusiastic volunteers who care deeply about the program they support and have limited visibility into the organization's financial and legal obligations. The tax and compliance newsletter is your opportunity to change that. Members who understand the club's nonprofit status and its obligations are better positioned to protect it.

Describe the organization's tax status

Tell members clearly what the organization is: a 501(c)(3) nonprofit, a social welfare organization, or whatever category applies. Explain what that status means in practice: donations may be tax-deductible, the organization does not pay federal income tax on its exempt activities, and the organization must file an annual return with the IRS to maintain that status.

Explain the annual filing requirement

Name the form your organization files, the due date, and what happens if it is missed. For most small booster clubs, this is the 990-N, filed electronically at no cost through the IRS website. The due date is typically the 15th day of the fifth month after the organization's fiscal year ends. Miss it for three consecutive years and the tax-exempt status is automatically revoked. Say that plainly.

Report on this year's filing

Tell members whether the current year's return has been filed and for what period. If an accountant prepared it, say so. If the treasurer handled it directly, say that too. Members who know the filing is complete have one less thing to wonder about. Members who receive no information about filing may not know to ask.

Clarify what is and is not tax-deductible

Many donors to booster clubs assume everything they give is fully tax-deductible. This is not always accurate. A direct contribution with no benefit received is fully deductible. A gala ticket, a raffle entry, or a sponsorship with acknowledged benefits is partially deductible, only to the extent it exceeds the fair market value of what was received. Tell donors this so they can provide accurate information to their tax preparers.

Name who is responsible for compliance

Tell members who on the board is responsible for ensuring the annual filing is submitted: typically the treasurer with oversight from the president. Members who know there is a named responsible party feel more confident that compliance is being managed. The newsletter that establishes this accountability also holds the officers to it.