Maybe I missed another thread on it but front page of the LHL.

 

This is huge, huge, huge news.

 

http://www.kentucky.com/211/story/485490.html

 

The tax man is threatening a long-standing practice of Fayette County booster clubs — giving parents credit for fund-raising — in a move that could have broad implications for extracurricular activities nationally.

 

 

The Henry Clay High School band booster club recently paid about $30,000 in IRS penalties, and the Lafayette band boosters were hit with a $9,000 fine, which they are appealing. The IRS has also contacted the Bryan Station baseball boosters.

 

 

At issue is something booster clubs have done for years: giving parents credits for working at bingo parlors and concession stands and selling items ranging from candles to candy. In many cases, those credits are then subtracted from the annual fees parents pay for extracurricular activities such as band, cheerleading and athletics.

 

 

But it now appears that the IRS is tightening up on the private, non-profit booster clubs, saying benefits to individual parents are illegal unless they pay taxes on the money.

 

 

The IRS actions here could have an impact nationally, since most booster clubs follow the same procedures.

 

 

So, as I read this, I work a truck and tractor pull and they want to give me $50 off of my daughters sports package, than I am supposed to be turning that money in as income????

 

HHSDAD, I am real interested in your comments.

This is crazy

As someone who ran our Parish Bingo for years, I can tell you that it is indeed against the law (Kentucky Gaming Commission) to give credit to someone to work as a volunteer, such as when you work a bingo, festival or anything that has to do with Ky gaming Laws. As an example if you are told you "have to work the bingo or you will get billed such and such money for not working!" That is against the law as all workers must be "volunteers". Heck I can remember attending a session of the legislate dealing with the Ky Gaming Laws where they were talking about not even giving the workers a free coke while working!

In all my experience, especially at the grade school level, the volunteer hours at fundraisers (ours were mostly bingo's), were never compensated in any way to the parent. The proceeds raised were to help defray the costs of the sports programs, but no one individual parent ever received "credit" towards the costs they were responsible for.

As someone who ran our Parish Bingo for years, I can tell you that it is indeed against the law (Kentucky Gaming Commission) to give credit to someone to work as a volunteer, such as when you work a bingo, festival or anything that has to do with Ky gaming Laws. As an example if you are told you "have to work the bingo or you will get billed such and such money for not working!" That is against the law as all workers must be "volunteers". Heck I can remember attending a session of the legislate dealing with the Ky Gaming Laws where they were talking about not even giving the workers a free coke while working!

 

Is this only gaming? For example, I am scheduled to work a truck/tractor pull and my child's cost for a band trip would be reduced for me working.

 

Am I supposed to now count that as income on my tax returns?:confused:

Is this only gaming? For example, I am scheduled to work a truck/tractor pull and my child's cost for a band trip would be reduced for me working.

 

Am I supposed to now count that as income on my tax returns?:confused:

 

The issue is this-if you are personally receiving some sort of compensation(in this case, reduction of your child's costs), it would be income for you. If your volunteering reduces the costs of the trip overall for the band, that's different. There is no individual compensation, it's collective.

Is this only gaming? For example, I am scheduled to work a truck/tractor pull and my child's cost for a band trip would be reduced for me working.

 

Am I supposed to now count that as income on my tax returns?:confused:

 

Don't know about the IRS but the Ky Gaming Commission, yea I understand what those folks require, at least as of a couple of years ago before I retired from our Bingo!

 

Let's say you sell raffle tickets at the truck/tractor pull, to earn some extra money from the crowd you have in attendance, then yes it's against the Ky Gaming Commission rules (thus) the law! Even if that prize was a quilt that little Mary Grandmother made, it is still considered gaming and if you don't have a Ky Gaming License, you could be in deep dodo, if someone complains to the Gaming Commission about it.

 

The Gaming Commission of Kentucky doesn't mess around, they visit often and they don't have to tell you they are coming.

The issue is this-if you are personally receiving some sort of compensation(in this case, reduction of your child's costs), it would be income for you. If your volunteering reduces the costs of the trip overall for the band, that's different. There is no individual compensation, it's collective.

 

That is really huge for many, many programs.

 

A good number of schools reward the parents/students that are working instead of reducing the cost of all the students including the parents who want to do no work at fundraising at all. (And that is not necessarily a knock. Some parents have plenty of funds and would rather just pay for their child's costs than work a fundraiser.)

Don't know about the IRS but the Ky Gaming Commission, yea I understand what those folks require, at least as of a couple of years ago before I retired from our Bingo!

 

Let's say you sell raffle tickets at the truck/tractor pull, to earn some extra money from the crowd you have in attendance, then yes it's against the Ky Gaming Commission rules (thus) the law! Even if that prize was a quilt that little Mary Grandmother made, it is still considered gaming and if you don't have a Ky Gaming License, you could be in deep dodo, if someone complains to the Gaming Commission about it.

 

The Gaming Commission of Kentucky doesn't mess around, they visit often and they don't have to tell you they are coming.

 

So, is all of these split the pot deals illegal than unless the group has a gaming license?

Doesnt the IRS have better things to do?:confused:

So if I donate hours working for a professional team in OH to benefit my school's fundraiser it's wrong?

So if I donate hours working for a professional team in OH to benefit my school's fundraiser it's wrong?

 

If you receive a direct benefit (ie your kid's expenses reduced) yes. If the hours benefit the program as a whole, no.

So, is all of these split the pot deals illegal than unless the group has a gaming license?

 

From what I understand, again unless the rules have changed, YES!

 

It is gaming, nothing different than what you would do in a casino when you place a bet and win/lose. Now does anyone call the gaming commission to complain, or does the gaming commission go out of it's way to find someone at a school doing this? Well not usually but.....

What if you changed the wording? For instance, what if the rule was that parents are expected to work x amount of hours and if they dont, then they have to pay a fee?

What if you changed the wording? For instance, what if the rule was that parents are expected to work x amount of hours and if they dont, then they have to pay a fee?

 

I am afraid that the answer is going to be that if the parent is receiving financial benefit via the cost of their child participating being reduced, they are going to be expected to pay income taxes on said income.

 

 

This is also where the idea is coming that if you give one of your coaches a nice polo shirt for coaching, you are expected to turn that in as taxable benefits and they, I believe, will have to pay income taxes on receiving the polo shirt.