Tuesday, August 12, 2008

Fund-raising takes a hit

This from the Herald-Leader, Photo by David Stephenson:

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...

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