tax classification for my farmers market

[toddwetzel2]

Seeking input ASAP.  I help to manage a farmers market.  We are a 13 year old producer-only market with an all-farmer board of directors.  The IRS wishes to revoke our classification as a 501c.3 non-profit and re-cast us as a C Corporation.  The C Corp designation seems to be unsuitably onerous for a small market.  Other markets I've been involved with seem to get around this by legally existing as projects of a town or borough, or as a sidearm of a pre-existing community organization.  Does anyone have any input from a self-standing market organization?  

Thanks!

Todd Wetzel 

[laura.jamie]

Hi Todd,

With the help of Penn State Law School's Rural Economic Development Clinic, we recently created a 501(c)(3) nonprofit that serves as an umbrella organization for the two farmers' markets in our county (one of which was new in 2017 and the other of which had been operating for 10 years without official entity status).  The board includes a mix of farmers/vendors and community members.  The nonprofit was created for charitable and educational purposes -- to administer the markets' SNAP and Bonus Bucks programs and to conduct cooking demos, among other things.  Perhaps you can make the case to the IRS that your market merits retaining its 501(c)(3) status because you're engaged in similar charitable and/or educational activities.  This could entail revising the statement of purpose in your Nonprofit Articles of Incorporation.  (Ours reads as follows:  "To provide food and nutrition education in Huntingdon Co., to operate charitable programs relating to food and nutrition, to provide educational support to other farmers' markets, and to engage in any other lawful purpose.")  Hope this helps.  You're welcome to drop me an email if you have follow-up questions:  laura...@gmail.com

Best,

Laura White

Treasurer, Huntingdon County Local Food Association