Youth Sports Team

[sychan29]

I applied for and received an EIN in order to open a bank account for a youth baseball team.  This will be used to collect due from families and to pay for a few tournaments that we will enter.  It will be a few thousand dollars each year.  We did not apply to be a 501c entity. 

Now that I have the EIN, does this mean I have to file a tax return for the sports team every year?  And do I need to file with the state as some sort of business entity? 

[Critter-3]

When you got the EIN  you had to indicate which type of entity you were going to be ... what did you put on the SS-4 ?    And what tax form did the IRS tell you to file on the EIN verification letter ? 

[sychan29]

I applied under Additional Types, Sports Team (community).  That was the best description for us.  

On the verification letter, it defaulted us to a non-profit organization and pointed us to a Publication with information about applying for tax exempt status.  We weren't planning on doing that for this limited scope because I had heard that there were additional steps and it didn't seem worth it to us.  

"When you submitted your application for an EIN, you checked the box indicating

you are a non-profit organization. Assigning an EIN does not grant tax-exempt status

to non-profit organizations. Publication 557, Tax-Exempt Status for Your

Organization, has details on the application process, as well as information on

returns you may need to file. To apply for recognition of tax-exempt status under

Internal Revenue Code Section 501(c)(3), organizations must complete a Form

1023-series application for recognition. All other entities should file Form 1024 if

they want to request recognition under Section 501(a).

Nearly all organizations claiming tax-exempt status must file a Form 990-series

annual information return (Form 990, 990-EZ, or 990-PF) or notice (Form 990-N)

beginning with the year they legally form, even if they have not yet applied for or

received recognition of tax-exempt status."

[Critter-3 · Accepted solution]

.https://cullinanelaw.com/nonprofit-law-basics-does-our-nonprofit-have-to-file-tax-returns-or-an-annu...

You have your answer :   

Nearly all organizations claiming tax-exempt status must file a Form 990-series

annual information return (Form 990, 990-EZ, or 990-PF) or notice (Form 990-N)

beginning with the year they legally form, even if they have not yet applied for or

received recognition of tax-exempt status."

[Rick19744]

I have included a few links that should be helpful.  I also recommend that you have a short meeting with an attorney that provides NFP advice.

You may or may not have to file for NFP status according to the form 1023-EZ instructions:

https://www.irs.gov/pub/irs-pdf/i1023ez.pdf

If you don't file for NFP status, you will be a taxable entity, which will depend on how you completed your SS-4.

Get some upfront legal and tax advice.  Even though the $$ are not significant, penalties for not filing correctly will easily exceed any tax liability, if applicable.

https://nilanjohnson.com/you-run-a-youth-sports-organization-should-you-set-up-a-501c3-or-an-llc/

Since this is most likely a very small group, any filing requirements should not be overly taxing, but you need to understand which forms are applicable.