Has anyone attempted to start an Assoc.

[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.