<VV> test irs

[Vairzwa]

Just wanted to show you why we can't give money away to an individual member of the club.
I liked your idea, but it just isn't legal.

Having a donation thing set up would be a better alternative.

IRS Tax Code: 501(C)(3)
>From Title 26-INTERNAL REVENUE CODE Subtitle A-Income Taxes CHAPTER 1-NORMAL TAXES AND SURTAXES Subchapter F-Exempt Organizations PART I-GENERAL RULE
(b) Prohibited transactions
For purposes of this section, the term "prohibited transaction" means any transaction in which an organization subject to the provisions of this section-
(B) Subparagraph (A) shall not apply to an entity unless no part of the net earnings of such entity inures to the benefit of any private shareholder or individual.

  *
Engaging in prohibited activities: Nonprofits are restricted from certain activities, Engaging in such activities can lead to revocation.
  *   Private benefit/inurement: An organization's assets or income cannot unduly benefit individuals or private interests related to the organization. This is known as private benefit or inurement.

Impacts of losing 501(c)(3) status

  *   Loss of tax benefits: The organization will no longer be exempt from federal income tax and donations will not be tax-deductible for donors.
  *
Legal and financial repercussions: The organization may be liable for unpaid taxes, and potentially face penalties and interest.

I just don't want the club to have any problems with the IRS.

Gary