We are coaching an All-Star baseball team that operates only with sponsorship and donations. The league that the team plays under let their non-profit EIN number expire. Business want to write off sponsorship/donations to our team, but we can not give them the EIN number since it has expired. The league states that they are in the process of having the EIN re-instated, however this could take months. Can the business still write off sponsorships/donations made to our team and if so, how can they do that?
Contracts / Agreements Lawyer
Do you mean the league lost its tax exemption. EINs do not expire. Business may be able to consider sponsorship as a business expense but not a charitable deduction if the league is no longer a charity.
1 lawyer agrees
You either misunderstood or the officials mis-stated what happened. EIN numbers do not "expire." An EIN has nothing to do with the league's status as a tax-exempt charitable organization. That is a status granted by the Internal Revenue Service. It does not "expire" but it can be lost because of non-compliance with the rules and laws that govern it. If the organization applied for and received designation as a "charitable tax-exempt" organization it meant that donations to it were deductible by the donor and that it did not pay income tax on its tax-exempt income (but it would pay tax on its income which was unrelated to its tax-exempt activities). Bottom line, we can't really help because we don't have correct facts. And, I don't think you were given correct facts by the organization. From a business perspective I would never advise a business client to take a deduction for money given to an organization in the position that yours is in unless it was specifically for advertising. That would be a business expense. But there had better be advertising and the business would need to have proof of it.
DISCLAIMER: This is not specific legal advice and does not establish an attorney/client relationship.