What Should 501(c)(3) Sports Clubs Know About Form 990 Filing?
Any nonprofit organizations that operate towards any exempt purposes are provided with an exemption from paying federal taxes under the IRS Section 501(c)(3).
This article explains how Sports Clubs can obtain 501(c)(3) tax-exempt status and what are their annual tax filing requirements.
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Sports Clubs - An Overview
Sports clubs are organizations that are organized and operated by a group of members exclusively to support any sporting activities.
A sports club can take part in more than one sport. If a sports club comprises multiple sports sections, they are termed a multi-sport club.
Generally, a sports club can be classified based on
- Types of sports it is involved in
- Age category (Children or Youth)
- State or Division
Are Sports Clubs Eligible to Obtain 501(c)(3) Tax-Exempt Status?
Yes! A sports club may be regarded as a nonprofit organization and qualify for tax exemption under section 501(3) provided they meet any of the following criteria, according to IRS Rev. Rul. 80-215.
Charitable purpose - Promotes and regulates a particular sport among a group of individuals under 18 years of age. Also, organizes local and state-wide competitions for individuals and stimulates the growth of the sport
Educational purpose - Combating juvenile delinquency by teaching a particular sport to children by holding clinics conducted by qualified instructors and by offering free instruction, equipment, and facilities
Fosters National or international amateur sports competitions.
Section 501(c)(3) Requirements:
In addition to the requirements mentioned above, Sports Clubs are required to fulfill the following requirements that are common for all section 501(c)(3) organizations:
Should be organized and operated exclusively for exempt purposes (charitable, educational, etc.)
Should not incur profit for any private shareholders.
Should not be part of political campaigns
Should spend only limited amounts for lobbying
How can Sports clubs Obtain Tax-Exempt Status?
Sports clubs that need to obtain 501(c)(3) tax-exempt status are required to file Form 1023, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.
They can also use Form 1023-EZ based on their gross receipts (< $5,000) in a taxable year and their answers on the eligibility worksheet.
Here are the steps to apply for 501(c)(3) status using Form 1023:
Register for an account on Pay.gov
Enter “1023” in the search box and select it.
Complete the form.
What are the 990 Filing Requirements for Sports Clubs?
Sports clubs that obtain 501(c)(3) tax-exempt status from the IRS must file Form 990 every year to meet their tax filing requirements.
The information required for 990 forms may include the Sports clubs’ basic details, financial information, activities and more.
The Form 990 series consists of different form variants. Sports clubs are required to file the applicable form based on their gross receipts and assets.
|Form type||Applicable to|
|Form 990-N||Sports clubs with gross receipts less than or equal to $50,000|
|Form 990-EZ||Sports clubs with gross receipts less than $200,000 (and) assets less than $500,000|
|Form 990||Sports clubs with gross receipts equal to or greater than $200,000 (or) assets equal to or greater than $500,000|
Sports clubs that have generated an income of $1000 or more through unrelated businesses during the corresponding tax year must file Form 990-T.
Additional Filing Requirements for Sports Clubs
Sports clubs that file 990 or 990-EZ and have generated an income of $1000 or more through unrelated businesses during the corresponding tax year must file Form 990-T.
Sports clubs that file 990 forms may also be required to include Schedules to report additional information as required by the IRS. There are 16 Schedules available in total. Learn more about Schedules
When is Form 990 Due For Sports Clubs?
Sports clubs that obtained 501(c)(3) tax-exempt status must file Form 990 on or before the 15th day of the 5th month after the organization’s tax year ends.
If the Sports club follows a calendar tax year, then the deadline to file Form 990 for the 2022 tax year is May 15, 2023.
Operating on a fiscal tax year?
Use our due date calculator to find your due date.
Sports clubs that fail to file 990 forms may be subject to penalties. The penalty amount ranges from $20/day - $110/daybased on the sports club’s gross receipts. Learn more
Tax 990 - The One-Stop Solution for Sports Clubs to Complete 990 filing!
Tax 990 is an IRS-authorized e-file provider that simplifies preparing and e-filing 990 forms with various
These are just a few of Tax 990’s features that enhance your 990 filing.
Free 990 Schedules - Automatically includes the organization’s required 990 Schedules at
no extra cost
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Built-in Error Check - Identifies any IRS errors in the completed forms before transmission
Multi-User Access - Invite users to manage the filing process or to review and approve forms
Instant Status Updates - Provides instant updates on the IRS status of forms via email and
Live Customer Support - Our support team assists you with your questions via live chat, phone,