Is Little League a 501c3 Organization?
Discover the distinction between Little League International's 501(c)(3) status and how individual local leagues can operate under its group exemption.
Little League International, the governing body for youth baseball and softball, is a federally recognized 501(c)(3) tax-exempt organization. This status applies to the parent organization in Williamsport, Pennsylvania, but it does not automatically extend to the thousands of individual leagues across the country.
Local Little Leagues are considered separate entities. While not inherently tax-exempt, they can gain 501(c)(3) status by being formally included under Little League International’s group exemption. This structure simplifies the process, allowing leagues to secure tax-exempt status without navigating the IRS application process independently.
Understanding Little League’s Tax-Exempt Structure
Little League, Inc. holds a group exemption number from the IRS, which allows it to extend its federal tax-exempt status to subordinate organizations affiliated with it. To be eligible for this inclusion, a local league must be an officially chartered member of Little League, Inc. and remain subject to its general supervision and operating policies. This charter establishes the formal link required for the group exemption to apply.
The group exemption is a mechanism for parent organizations to efficiently manage the tax status of their affiliates. Instead of local leagues individually applying for 501(c)(3) status, the parent organization vouches for them, confirming they operate in furtherance of the central organization’s exempt purpose. This purpose is primarily educational, focusing on the instruction and training of individuals.
Each local league is responsible for its own governance, finances, and compliance. The group exemption covers the league’s federal income tax status, streamlining a significant administrative burden for volunteer-run organizations. This structure ensures that while operations are local, the charitable and tax-exempt purpose is uniform and aligned with the national mission.
How a Local League Gains Tax-Exempt Status
For a local league to be included under the group exemption, the first step is obtaining a federal Employer Identification Number (EIN) from the IRS. An EIN is a unique nine-digit number that identifies the league for tax purposes, similar to a Social Security number for an individual. This can be acquired by submitting Form SS-4, an application that can be filed online through the IRS website.
Once the EIN is secured, the league’s board must draft a formal written request to Little League International headquarters. This letter explicitly asks for inclusion in the group exemption and must contain the league’s name, address, and its newly obtained EIN. This step formally notifies the parent organization of the league’s desire to be recognized as a 501(c)(3).
After processing the request, Little League International will send a confirmation letter to the local league. This document, often accompanied by a copy of Little League’s own IRS determination letter, serves as the local league’s official proof of its 501(c)(3) status. The league will provide this letter to donors to substantiate its ability to receive tax-deductible contributions.
Operating as a Tax-Exempt Organization
Once a local league secures its 501(c)(3) status, it can begin accepting tax-deductible contributions. This means individuals and businesses that donate to the league can deduct the value of their contributions on their federal tax returns. This status may also make the league eligible for exemptions from certain state-level taxes, though the league must independently verify and apply for these with its state revenue agency.
An ongoing responsibility for every league under the group exemption is the annual filing requirement with the IRS. The specific form a league must file is determined by its annual gross receipts. Most local leagues with gross receipts under $50,000 are required to file Form 990-N, also known as the e-Postcard, which is a simple online filing that confirms the league is still active.
Failure to file the required Form 990-series return for three consecutive years results in the automatic revocation of the organization’s tax-exempt status. If this occurs, any income the league receives becomes taxable, and donors can no longer deduct their contributions. Reinstating the status requires working with the IRS to resolve the non-compliance before the league can be included again under the group exemption.