Has anyone attempted to start an Assoc.

[ShadowStripes]

Good advice Nevada. REFVA, be very careful about undercutting your association. They will never assign you games again if you pull a stunt like that. I'm willing to bet that if the summer league is as large as you say it is and the dominant association isn't working the games, it is because of a contract dispute with pay rather than the number of officials available. I'm also willing to bet your treading on thin ice with this.

This kind of stuff does officials (who are for the most part grossly underpaid for the kind of crap we put up with in summer leagues) a disservice. By working independent of the association and picking up a few gyms, you allow the leagues to divide and conquer officials by keeping fees at at an unreasonably low level. It's a free market and you're well within your rights to do it, but don't get upset if you get fingered (and you will) and shut out by your association.

[REFVA]

Believe me I'm not under cutting anyone. The rate is par to league play. When I approached the association who is doing the major game, they told me what the contract rate was based I already new my rate. They told me out right, they don't have enough officials due to camps, vacations, other sports etc. Plus they are not my home base association. They want me to become an official in their association as well as my group. But dues and 10% does not make it worth for any of the officials. Since we have to do some travel to NO. VA.

[BayStateRef]

Originally Posted by REFVA

They told me out right, they don't have enough officials due to camps, vacations, other sports etc. Plus they are not my home base association. They want me to become an official in their association as well as my group. But dues and 10% does not make it worth for any of the officials. Since we have to do some travel to NO. VA.

Competition is great. Except if you are the group that has the "lock" and now some upstart wants to cut in on your turf. With better service. Better officials. Maybe even lower fees.

The situation in your area is nothing like in mine. The associations (for the most part) do the recruiting and training of new officials and continuing education for the rest of us. They have nothing to do with assigning -- although it sure helps if the key assignors also are members of your association.

I read with interest the inner workings of assigning in this region. If these exisiting associations are able to keep such a tight leash on both officials and organizations and keep competitors out (presumably by refusing to assign games to officials who work for these "renegade" outfits), then you have a lot more to worry about than insurance and fees.

[Kelvin green]

Originally Posted by BayStateRef

You have to make sure you have all the legalities covered.
Maybe. Or not. You really don't.

1) What type of business entity is it really, a true unincorporated association, a sole proprietorship, an LLC, or a corportation. It make a difference on how taxes get filed.
Keep it simple. You really don't need to incorporate in any form.


2)No matter what you will need an EIN from the IRS. Required to file and open bank accounts...
Not true. You can register as a "DBA" (doing business as) with your local government. It's cheap ($10/year here) and it is all you need to get a bank account. A copy of the DBA and your Social Security number is all the bank needs.

3) You will want to make sure all officials are contractors. Get the appropriate forms from them to get SSN's (W-9's I belive) HAve them sign a contract so they understand you will not cover them as employee.
Absolutely not. This is the wrong advice. The officals are not contractors or employees. They are independent contractors. Only if you pay any one of them more than $600 do you need to give them a 1099.

4) Check out your state's workers comp laws some states require each contractor to either have a waiver certificate or carry it..
No. No. No. They are not employees. You do not have to deal with workers comp.

5) Check out you unemployment laws, if you establish something like a corp you may end up filing UI every quarter (at least on your earnings).
Again...bad advice. They are not employees. They are independent contractors. No unemployment to deal with.

6) Depending on the type of entity you may need liability insurance and ensure each official has liability insurance. There are simple ways to do that including charging enough to insure the teams and then you may be able to tack on as an additional insured... If they are all NFHS officials you may be ok, contact their insurance administrators... You can alo insure your organization thru NASO and it it reasonable.. Because my softball group was independent I used Sportsples Operators and Developers )
I am not insured by my association. I am not insured by my assignors. I am an independent contractor. I do not see the need for insurance, but you can talk to your insurance agent about this. You certainly have some liability if you assign an official who does something "horrible." But if you have no assets, then you have no exposure.

You can make this as simple or complicated as you want. As I said...it is just like starting any new business. You decide how much you want to pay up front -- or whether you want to do it much simpler.

You better check your business laws before telling somone they are getting bad advice. There are legalities. Yes you can do a DBA (sole proprietorship) and the individual is at risk for running the association/business. If the person is looking at some sort of limited liability then they can seek the legal protection of an LLC or a corp.

Even sole proprietorships get EIN's so they dont have to provide SSN's to the contracting organizations. If the City/league whatever pays money they may have to do a 1099 for ain individual is a sole proprietorship

Official's are independent contractors but you are required to get a W-9 or equivalent. They have to provide a SSN (that's what the W-9 is for) if not then you are required to withold money. Even if you pay them less than the $600 threshold for reporting on a 1099.

In Utah and in many other states even though the person is an independent contractor, the contractor is required to provide a certificate that they are exempt as self employed. (Although not enforced much..) I had a municipality and a restaurant group that rquired the exemption certificates or they would not hire us. I never said he had to pay WC on the contractor but may have to have the contarctor provide something

If he decided to incorporate he would have to pay UI on any moneies he paid to a principal.... Once again depends on the business entity created. That's why I said check the UI laws...He doesn not have to pay on independeny contractors but may have to pay on himself depending on organization

Youre right if you have no assets why get insurance. That's why we all have coverage if we register with NFHS. But if they sue the association thinking it is deep pockets... (even if it is not) insurance would be nice to pay the attorney's fees to fight the suit, or pay something so you would not lose the little things like your car or house. I am not losing the equity in my house over a twent dollar basketball game when I could pay insurance premium.

Like I said I had an association that began as a corporation and dealt with each one of the issues above, When it went to one league I dropped the corporation bu still had some of the issues to deal with. Not bad advice been down the road...

[JRutledge]

Originally Posted by Kelvin green

Even sole proprietorships get EIN's so they dont have to provide SSN's to the contracting organizations. If the City/league whatever pays money they may have to do a 1099 for ain individual is a sole proprietorship

Official's are independent contractors but you are required to get a W-9 or equivalent. They have to provide a SSN (that's what the W-9 is for) if not then you are required to withold money. Even if you pay them less than the $600 threshold for reporting on a 1099.

Kevin, this is simply not true. Now any organization that is paying out money will have to report those expenses in their tax reports, but the independent contractor does not have to fill out a W-9. I have been sent forms from schools but I do not fill them out. I file my own information for my tax purposes.

Originally Posted by Kelvin green

In Utah and in many other states even though the person is an independent contractor, the contractor is required to provide a certificate that they are exempt as self employed. (Although not enforced much..) I had a municipality and a restaurant group that rquired the exemption certificates or they would not hire us. I never said he had to pay WC on the contractor but may have to have the contarctor provide something

This is not true in my state. We only have to file income that we receive. We do not have to declare being self-employed, because people might have other jobs or other income. Independent contractor status is a state law for the most part. So every state might have different requirements and different laws that regulate this. Our State Association (The IHSA) cannot even set up an evaluator program for playoff purposes unless they want to violate independent contractor law. This would make all officials employees of the IHSA and things like benefits and insurance would be the responsibility of the IHSA. This is why I stated this issue is not a universal issue across the board. What might be a law in one state might not apply at all in another state. Not all have the same laws about independent contractors and not all states have the same tax laws. Texas has no income tax, so how you are taxed and who taxes you will vary from one place to another.

Also none of the information you are talking about even applies to where I live. Associations are there for training, they are not there to pay officials and assign officials to work games. The money is taken in to give directly back to the officials that pay dues. Associations do not have to file taxes as cooperation and often have "non for profit" status" which is a state law.

Peace

[Dan_ref]

The last place I would go for tax or business advice is a basketball official's internet forum.

Do yourself a favor & pay for an hour with an accountant or attorney.

You'll learn something & it's deductible....oh wait, I'm giving you tax and business advice aint I...

[Kelvin green]

Originally Posted by JRutledge

Kevin, this is simply not true. Now any organization that is paying out money will have to report those expenses in their tax reports, but the independent contractor does not have to fill out a W-9. I have been sent forms from schools but I do not fill them out. I file my own information for my tax purposes.



This is not true in my state. We only have to file income that we receive. We do not have to declare being self-employed, because people might have other jobs or other income. Independent contractor status is a state law for the most part. So every state might have different requirements and different laws that regulate this. Our State Association (The IHSA) cannot even set up an evaluator program for playoff purposes unless they want to violate independent contractor law. This would make all officials employees of the IHSA and things like benefits and insurance would be the responsibility of the IHSA. This is why I stated this issue is not a universal issue across the board. What might be a law in one state might not apply at all in another state. Not all have the same laws about independent contractors and not all states have the same tax laws. Texas has no income tax, so how you are taxed and who taxes you will vary from one place to another.

Also none of the information you are talking about even applies to where I live. Associations are there for training, they are not there to pay officials and assign officials to work games. The money is taken in to give directly back to the officials that pay dues. Associations do not have to file taxes as cooperation and often have "non for profit" status" which is a state law.

Peace

Some associations are non profit. Some sports associations are for profit, That is not state law but federal tax law. Not for profit status may be allowed in state law but the ultimate decision for monies in the association is the IRS.

The organization has to be approved by the IRS not be non profit. Unicorporated associations/clubs have a threshold before income is taxable.

If the association is big enough and goes over the threshold limit, the association gets stuck paying taxes...

Some associations do assign officials and pay them... Some associations are "businesses" taht's why I pointed out some of these issues. I was speaking in general terms. For tax purposes the independent contractor is the same. State laws vary on the use of the term independent contractor for UI purposes or for WC purposes

Better go back and read the IRS rules. The law requires us to provide our SSN to those we contract with; if we refuse the payor can impose the 28 percent backup witholding. (W-9's are the way most require us to provide the SSN)

Officiating is self employment income. That is consistent across the board.

What I stated was that in some states the law requires the individual independent contractor to have workers comp or have a certificate exempting them from WC. This obviously does not apply to every state but many have the rule...Most probably have not looked at sports officials but some have...

You have to look at who the person is contracting with, is it the association ?(association is paying the money to sub contractor) or is it some other organization, school board etc. The contracting agency can or in some states is required proof of workers comp before they hire an independent contractor. Like I said that occurs in some states not all. Even in states it is not enforced across the board by governemntal agenices who read the same statute.

Dan is absolutley right, what I was pointing out is the complexities of the law when it comes to running something like this. Paying an attorney who undesratnds business law in the state is worth the time and grief, and allows the "association" to be set up correctly and stay away from trouble with the law..

[JRutledge]

Kevin,

I think you are not reading what I am saying. You are talking about associations paying moneys and filing for workman’s comp when not a single association (in basketball) uses association funds and pays our officials where I live. As a matter of fact the lawyers in a few associations that I belong to have gone out of their way to take wording out of Association Constitutions so they make it clear that no games are paid through the associations. It is not an IRS issue if the association is not paying money to officials. Schools and leagues are paying officials, not local associations. Even in the playoffs the host schools pay the officials the game fees, not the IHSA. So all these legal issues you keep talking about has nothing to do with where I live. If someone wants to start a local association, they do not have to go through all those hoops to do so. What you have said does not apply to where many others live if they are assigned in a similar fashion as to where I live. I know in Indiana, almost all games are given directly from the schools. The associations play no assigning role what so ever. So an official’s association is not going to have the same legal issues as you have described. Also independent contractor laws and many employment issues are state laws, they are not federal laws. That is why Texas can have no income tax and other places have income taxes. This is why I told everyone that they need to talk to their local individuals that would know these kinds of things. I know for a fact that no association where I live is “sub contracting” officials for anything. Also as a treasure of an organization at one time, we did not file taxes forms for paying officials. Our only focus was to train officials and run camps and other activities to the dues paying members.

Peace

[REFVA]

Guy's Thanks for all your input. Here in Va, Taxes, Wc etc. are needed 1099 have to be issued and so on. Just too much to go into.

I'll just be an independent. Just too much legal stuff.

Thanks to all.

[Jimgolf]

Originally Posted by Kelvin green

The organization has to be approved by the IRS not be non profit. Unicorporated associations/clubs have a threshold before income is taxable.

This is not quite true. 503C non-profit corporations just have different income reporting requirements than non-503C non-profits. Only 503C non-profits have to be approved by the IRS.

Speak to a lawyer. There are liablility concerns for any association.

[26 Year Gap]

Just my 2 cents, but it sounds like you are looking to be an assignor for these games and would not need to form an association. I would just have a basic contract outlining your responsibilities and not try to make it more complicated than it really is.