All Little Leagues Reminded to Retain Tax Exempt Status
Do you know your league’s federal tax exempt status?
A few years ago, Congress passed a law requiring all tax-exempt organizations, even the smallest ones, to file an annual return with the Internal Revenue Service (IRS). Any organization that does not file for three consecutive years automatically loses its federal tax exemption.
Loss of exempt status means an organization must file income tax returns and pay income tax, and its contributors will not be able to deduct their donations. Leagues included under Little League Baseball, Incorporated’s, group exemption number for 501(c)(3) status should be using the fiscal year period of Oct. 1 through Sept. 30, putting the filing date at Feb. 15.
For those leagues which have not filed a tax return since 2008, be aware that the returns due on February 15, 2011, would be considered the third-year deadline. Don’t jeopardize your federal tax exempt status by failure to file the appropriate 990 Form directly with the IRS. Filing those required forms on time is critical. Please click on the link below for the tax reminder letter sent out recently to all leagues currently included under our group exemption number detailing what is required: Reminder Letter (PDF)
All chartered Little League programs are not automatically included under our group exemption number. Each league must apply for inclusion by submitting a signed Letter of Intent providing Little League International with their Employer Identification Number (EIN) assigned by the IRS. Please review the tax exempt bulletin with the Letter of Intent form to apply at the link below: Tax Exempt Bulletin w/Letter of Intent (PDF)
Little League Baseball, Incorporated, DOES NOT file taxes on behalf of any subordinate leagues. Every non-profit organization must submit the “appropriate 990 Form” directly to the IRS annually to retain its tax exempt status, to remain in good standing, to comply with federal law and to avoid penalties. The organization also needs to file the appropriate required state forms for the same reasons. Since each state has different tax laws and requirements, it is up to the individual leagues to comply with them.
*In general, what must be filed depends on the organization’s financial activity:
- Organizations operating on a 10/1 – 9/30 fiscal year with gross receipts normally equal to/or less than $25,000 ($50,000 for tax years ending on or after December 31, 2010) must file Form 990-N (but may choose to file a complete Form 990 or Form 990-EZ).
- Organizations with gross receipts greater than $25,000 and lesser than $500,000and total assets less than $1,250,000 must file Form 990-EZ or a complete Form 990.
- Organizations with gross receipts greater than/or equal to $500,000 or total assets greater than/or equal to $1,250,000 must file Form 990.