Scouts-L Mail Archive for December of 1999: Re: Deductibility of Contributions
Re: Deductibility of Contributions
Sat, 18 Dec 1999 07:08:58 -0800
One further item, which the tax attorneys, if any, and CPA types
among us, if any, may be able to correct if wrong, but:
The discussion to date has not drawn any distinction between the
running of a large non-profit organization, with the formalities
attendant upon that, and the running of a very small such
organization, with the relative informalities attendant upon that.
Running a small one vis a vis the IRS the same way one would run a
large one, would offer many advantages and assurances. However, about
five years ago that was not necessary and I would be curious whether
anything has really changed in that regard.
If an organization is blessed and sanctified by IRS as eligible to
receive a donation which will be deductible to the donor, then that
is conclusive upon all concerned.
If an organization has not been so blessed and sanctified by IRS,
because the organization has not requested the same, yet the
organization does in fact meet all the tests which would be applied
if the organization requested to be blessed and sanctified, then the
donation is still deductible.
One might upon audit have to prove the character of the organization.
With respect to a Scout troop, I would not expect that to be
questioned. In fact, for that matter, my taxes with respect to 1989
were audited, that being a year I had very large Scout deductions as
I went to a Jamboree. They were satisfied with my producing receipts
to verify the expenditures. They did not even question the
deductibility of pizza I bought to induce the PLC to meet on another
school evening. (That worked, by the way -- attendance was primo). My
then troop had not applied for any status. It was chartered to the
local PTA, but the IRS did not ask about that, and I do not know if
my local PTA itself ever applied for any recognition.
My reasoning in this is, that section 170 last time I read it
describes organizations deductions to which will be deductible, and
does not describe them in terms of prior IRS approval, but rather
simply in terms of their character as governmental, educational, or
charitable. Hence IRS approval would support bona fides and preclude
later debate, but IRS approval does not create educational and
charitable status. IRS approval merely certifies that.
The IRS does not want to have to cope with applications from every
parent group in the nation. It used to be the case that exempt
organizations did not have to file an income tax return or other
report of cash flow to the IRS, unless the individual organization
met a test of gross volume of revenue -- possibly 5 or 10 thousand,
maybe more by now. When I looked at that around 1990, I was satisfied
my then Troop had no hope of rising to that threshold.
When I incorporated an organization to raise tens of thousands to
build a wharf and attach fish rearing pens to it it, we went the full
route with the IRS in order to assure donors that they were getting a
deduction. Yet after the project was over, the income and expense
level for operations did not rise to the threshold of reporting.
Asst Scoutmaster, District Committee, District Commissioner,
Lewis-Clark Trail District, Inland Northwest Council 611, &
'a good ol' Fox too'; Es Kaielgu Lodge 311, Tseminicum Chapter,
Vigil, mailto:email@example.com ; and Macintosh fan.
Take a look at http://www.consultburton.com/scouter.html