Does one need a permit for selling raffle tickets for a charity?

[minnesotafrozen2000]

We are putting together a benefit for my cousin, and want to sell raffle tickets for prizes to raise funds.

[Iffy]

The law and IRS rules are very strict on operating a raffle. You must be a registered Tax Exempt 501c
All participants must be 18 yrs of age.
Sale of tickets must be within 180 days of raffle date.
Failure to comply is a federal offense
You need a registered nonprofit to raise the funds for your cousin otherwise all proceeds are taxed as income

[ThunderousDominator098]

Raffles are illegal in most states. It doesn't matter if you are a nonprofit or not -- raffles are gambling, and gambling is strictly regulated in all US states.

Some nonprofits "sell" raffle tickets, but they get around the law by saying you can get a ticket for a "suggested donation" amount. Legally, anyone could say, "I'm not giving you any money but I want a raffle ticket", and you would have to give them such.

Legally, you cannot sell raffle tickets for your cousin. But here's what you can do legally:

-- if you haven't already, a bank account needs to be set up ONLY for funds raised for your cousin. It needs to be in your cousin's name, or in the name of your cousin's guardian. Work with your bank to set this up. All donations need to go directly into that account. Your goal is to keep money out of the hands of individuals (all checks are payable to the account, not to anyone else) and to keep track of money for tax reporting purposes (and so YOU won't end up having to pay taxes on what you raise). Every donor should receive a receipt.

-- make sure you and all of your family have info on your Facebook page about your cousin's situation, why he or she needs this money, etc. Provide updates on how much money has been raised versus exactly how much is needed.

-- always be as specific as possible about exactly how much money needs to be raised

-- Turn all family birthday parties into a fundraiser for your cause. Invite friends to your house or to a restaurant, and ask in your invitation that, in lieu of gifts, people make donations to your cousin.

-- have a garage sale to raise money for your cousin. Ask friends, relatives, neighbors and others to donate items for your sale. Have large signs at the garage sale that say why you are raising money.

-- Work a series of jobs in the informal sector (walk dogs, pet sit, provide child care/baby sit, do yard work for neighbors and friends, etc.) and save some or all of the money you make for your cause.

-- Sell items on eBay. Ask friends, relatives, neighbors and others to donate items for your sale. Take the money that you raise and donate it to your cousin.

-- Make it clear to those who buy items or donate money that they will not receive any tax deduction for their purchase or donation

[phrogster1]

Check with the law in your local community. In ours, we have to get permission from the city council in order to hold a raffle. They look at things like how the money is being handled and what the money will be used for. Non-profit organizations have the best chance of gaining approval.