LOCAL SPORTS OFFICIALS ASSOCIATIONS

Part I:
When a local association goes at it along to "incorporate", they do it by getting the proper forms, fill-in, sign and get the forms notarized and submit application to the secretary of state. While this is a money saving way. Whats the point in doing it that way? There are two steps to becoming a true nonprofit. So its best to have a law firm do it for you. The firm will get association registered with the state, then apply for IRS tax exemption, which is in the Articles of Incorporation.

"any other charitable and/or education purpose within the meaning of Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1954 or the corresponding provision of any future United States Internal Revenue Law."

Part II:
There are many ongoing problems faced by non-profit organizations and local sports officials associations. Congress and the IRS perceive a great deal of fraud and non-reporting in the area of charitable giving and have a great deal of concern about taxpayers avoiding their legal obligations. As a result, the Pension Act of 2006 details the significant changes in the laws that deals with charitable organizations. These recent tax law changes are broadly ranged into several categories:

   1. Greatly increased information sharing between the IRS and state governments on exempt organizations.
   2. Greatly increased regulation and scrutiny of donor-advised funds.
   3. Greatly increased regulation and scrutiny of supporting organizations.
   4. Increased and more detailed reporting requirements in charitable information returns, including Form 990, with
   5. Reporting requirements extended to more charitable organizations.
   6. Increased penalties for self-dealing, excess benefit transactions, fraud and abuse.
   7. Increased reporting and scrutiny of in-kind and cash donations, with greater requirements for appraisals and        receipts.

NOTE: While IRS directives do not address local sports officials associations directly in its publications. These associations must follow the guidelines established for charity organizations. A local associations gross income is generated from 1099 contracting services, membership dues, registration fees, fines, etc.
More reasons for a local sports association leadership to consult with an attorney and public accountant. I was once told, "We have been during it this way for a few years, we know what we are doing". Wanna bet??
Unless you have legal experience and accounting skills, an association should seek professionals, who know what they are doing. Membership dues should be used to cover an association's "operating expenses" per sport season, not to be pocketed by the board of directors without being voted on by the general membership.
Does the board deserves compensation each year? NO!! This item must not be automatic for each season sports events, the general membership should vote to compensate their board of directors. Did the board conduct association's business in a orderly matter? Board of directors that operate with the hammer and sickle must not compensated.