My homeschool group earns some money as a fund raiser by cleaning up our county fairgrounds. Do we have to pay taxes on this money?
Normally income earned from an activity unrelated to your mission is called Unrelated Business Income and subject to income tax by the IRS. Cleaning up the fairgrounds is not related to your mission of providing services to homeschooling families, so it is an unrelated business income. But the good news is that the IRS will allow this income to be tax exempt if the work is preformed by volunteers. You told me that your homeschool group families are all volunteers-no one is paid. So you do not have to pay taxes on this income.
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