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[font "Comic Sans MS"][#800000][size 4]I have some very disheartening news to pass on to my fellow BFT’ers and ask you for your help in resolving this dilemma.[/size][/#800000][/font]
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[font "Comic Sans MS"][#800000][size 4]I was advised by a state agency that in order to solicit charitable donations such as equipment, food, cash, and services, that we had to be a registered federal charitable organization to do so without incurring tax liabilities for both us and the veterans ultimately receiving the donated items. I thought maybe the Utah DAV might be able to help and was informed that they do not have that authority and I would have to deal with the National HQ. I just got the following reply from the National HQ:[/size][/#800000][/font]
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[font "Comic Sans MS"][#000000][size 4] Quote:We thank you very much for your thoughtfulness and we would certainly help you if possible; however, the myriad of regulations that relate to fundraising coupled with the complexities of trademark licensing make it nearly impossible for us to take part in these types of events. We hope that you understand and that you will continue to recognize and support the needs of America’s disabled veterans. Best wishes to you in your endeavors!
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[/font][font "Comic Sans MS"][#800000][size 4]So we’re kind of back at square one. And that’s where I need your help. If you are a member of any federally registered charitable organization except the DAV, either national or local, and think that they might be able to support/sponsor our Wounded Warriors Fishing Day event in 2011, I need to know that as soon as possible. Without being able to operate under the umbrella of a registered organization, I’m afraid the event will not happen. And that would be a shame. So if you have any ideas, please pm them to me at your earliest convenience. Thank you.[/size][/#800000][/font]
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Bob Hicks, from Utah
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Hey Bob since this is a serious problem with making this event happen, I'm going to put this on the main board so the greatest number of members will read it.
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[font "Comic Sans MS"][#800000][size 4]That would be great Curt. Thanks.[/size][/#800000][/font]
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Bob Hicks, from Utah
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Which state agency would do this 30 days before an election?
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While nonprofits have to register with the state it's the IRS mainly dictating what hoops you have to jump through. I'm the president of a nonprofit but my mission statement precludes me from helping out. I think it's very unlikely to find a nonprofit (501c3 organization) that will have the ability to take this on because these type of activities would have to be already encompassed in it's mission statement with the IRS. Here's a link to the IRS info http://www.irs.gov/charities/charitable/...99,00.html.
If you can't find a nonprofit that deals with veterans to take it on maybe you should run it by a attorney if there is some way of doing it as a noncharitable event. By that people and organizations can still donate but it just won't be a charitable donation (tax write off for anyone). You don't have time to get all the paper work and IRS application done in a month to register as a nonprofit. Plus it'll run thousands of dollars unless you get an attorney to donate their time. The attorneys[pirate] are the ones that made all these ridiculous rules so they could charge us thousands just to help someone less fortunate out so good luck on finding one to run things by.
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What about a boy scout going for Eagle taking it on as a community service project?
Or a VFW post?
USO?
Just throwing ideas at the wall to see if one will stick.
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The reason I mentioned contacting an attorney is while gifts ( as oppose to donations) can be taxable income they generally have to reach a certain limit before any taxes start. I know the amount a person could give to any individual without paying taxes was $13,000 last year and tends to go up each year. Usually the donor is responsible for taxes not the recipient. Don't know who this works with donations toward a group of individuals. But if it's similar and all gifts are valued at less than the $13,000 or whatever the current maximum is it's quite possible that there would be any taxes to be paid. No deduction on taxes but many won't care about this so much. Not telling you this is the case for this event but I've run into my share of state workers that get some details and rules wrong because they too strictly interpret the law or don't fully understand federal laws to begin with. Another link about gift taxes from the IRS; http://www.irs.gov/publications/p950/ar0...k100099451
Good Luck. If you don't find a nonprofit to host this and don't have anyone for some tax advise let me know. I could run it by my CPA who use to work for the IRS or the attorney that set up my nonprofit
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Seriously, is there going to be an on-site auditor? If code pink shows up with cameras and note pads there may be reason to worry. However, given that the enlisted men swear to uphold the Constitution of the United States, I believe that taxation without representation trumps state and federal agencies when they subvert the founding documents to pad the pockets of politicians.
All laws are not legal and trying to be in line with regulations regarding donations from income that has already been taxed is a good way to prove you are an honest citizen to a bunch of dishonest thieves. Hold the event, get donations and volunteers (wish I could be there and wasn't working every day this week and 3 months out of the year for the federal whore house,) and pay tribute to these fine people without fear.
No state or federal agency, especially this close to an election, is going to even try to make an issue out of this because the crap storm from the conservative media would have the politicians that fund the regulatory agencies booted out of their donations and Leer jets by some really  voters. If no man asks permission to bear arms in a free society then neither should free men ask permission to donate to those that preserve every amendment. People need to get bold and let the government know that we are free men and not slaves.... or we can keep on being subjected to unconstitutional regulations and taking it up the tail pipe.
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Bob - I'm a CPA here in SLC and I prepare 990's for non profit organizations here in Utah. Therefore, I am familiar with section 501 C (3) and the other relevant regulation pertaining to tax deductible donations/solicitations. I know you must register your tax exempt organization with the state to "solicit" within that state. However, typically, the donor is looking for a tax deduction which results in all the red tape. Gifts, on the other hand, are not reported if under the statutory limits. I honestly don't know where the line is drawn (from a state point of view) on what constitutes a "solicitation". For example, do the families of a individual's untimely death "register" with the state (and IRS) to solicit funds through the local media on behalf of the children of the deceased? The same situation exists for "solicitations" for medical treatment of a person with a potentially terminal illness. I just don't believe that asking for a "helping hand" results in the regulation and scrutiny that a typical non profit has to endure! Hell, I know the panhandlers around this town aren't registered!!
Rick
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[quote Draggin_Steel]Gifts, on the other hand, are not reported if under the statutory limits. I honestly don't know where the line is drawn (from a state point of view) on what constitutes a "solicitation".[/quote][size 4][font "Comic Sans MS"][#800000]Thanks for the insight Rick. That state registration isn't that big a deal. Twenty-five bucks and a simple application to register as a non-profit. I belong to the Utah State Skeet Assoc. which is one of those.[/#800000][/font][/size]
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[size 4][font "Comic Sans MS"][#800000]It would appear that we need to look at this as soliciting 'gifts' for our veterans; not tax deductable donations that donors can write off on their tax return. Do you by any chance know what the statutory limit is for gift donations?[/#800000][/font][/size]
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[size 4][font "Comic Sans MS"][#800000]Another snag we run into with some businesses is this - they don't mind making the donation, but they want a tax number to waive the sales tax. The 'governor' always wants his share. Do we tell them they just need to consider that part of the gift?[/#800000][/font][/size]
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[font "Comic Sans MS"][#800000][size 4]Thanks again for the helpful info. And thanks to the rest of you for your comments, suggestions, and ideas. I really appreciate the help.[/size][/#800000][/font]
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Bob Hicks, from Utah
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[quote dubob][size 4][font "Comic Sans MS"][#800000] Do you by any chance know what the statutory limit is for gift donations?[/#800000][/font][/size] [/quote]
The annual exclusion for an individual is $13,000. Gifts made by businesses are technically limited to $25 deduction per recipient. In other words, a business could give eight fishing poles valued at $25 each to eight vets and receive a full $200 deduction. As far as the donee (vets), I can't imagine any agency questioning the taxability of what they received since it would be considered "de minimis" and most are in a low tax bracket.........if they even have to pay taxes at all!
I feel if you clearly state that you are NOT a qualified charity to a potential donor and, possibly, add "seek the advice of a qualified tax professional regarding the deductible of any gift/donation/contribution you make for said event" you then place the tax ramifications on the donor. Of course, you don’t want to misrepresent the event but you don’t want to deter people from helping!
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I ran into a similar situation this spring with the bass federation. Some companies will ask for the tax ID number just to make sure you are running a legit program. We are a 501 non-profit. They just want to make sure your not going to run off will all the goods. If I were you I would register it. Other things like a website or official letterhead from your non-profit will help. I'm sure there is a few guys on here with the skills to throw together a nice little site explaining your mission and goals. Trust me it will ease the burden of getting sponsors.
No business is giving you anything nor are they donating. They are becoming a sponsor of this particular event. They are trading some of their product for some of your product; "advertising". It is a non-profit partnership not a charity situation. Don't ask for a donation; ask if they would like to sponsor the event.
If a company gives you grief about anything just move onto the next one. They don't care about the sales tax. This is just a way for them to tell you "no" or to say were not comfortable your on the up and up. People will help if they feel like it is a legit program.
As someone else said the IRS cops are not going to mess with a bunch of smelly anglers with no intent to defraud the government.
The military branches can't officially endorse your event nor will you be able to use their name to get sponsors. However I'm willing to bet they [especially the Army NG] will suppy some support the day of the event if you can get some media attention.
One last little suggestion on getting fishing gear; many companies in the fishing industry run their budgets from Oct-Sept so now is the time to hit them up. Most set aside X number of dollars for sponsorships. If you wait until spring/summer many of the $$ allocated for sponsorship will already be expended.
There are many Utah Bass Federation members on this site or at least many who lurk on this site. If you can get a committe of UBF members together and come up with a plan. I would suggest you make a presentation to the UBF Board. If they feel comfortable perhaps they will endorse the program and you will be on your way......
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As I told you at the meeting I know some one who has a TAX number, I used it last time...
But he likes it to be called just what I called it before that is where the name came from...
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THAT would be a SAD reason not to have an event such as that!! What is the world COMING TO??!! Would NORML (National Org for the Reform of Marijawanna) be considered a non profit?? I got friends...and ex sherriff deputy AND ex military as a friend and the president of the Salt Lake Chapter.... dunno, but gunna call him and see if he knows...how IRONIC would THAT BE!! Maybe one or more Vets would vote "medicinal" on next election!!
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Thanks for the info Rodney, I have been doing these type of events for the last two years and never thought about the donations that were being given. Do you think I should question the companys that have given to the events to make sure I'm doing it properly so I don't get dinged on my taxes? I always approached them as being sponsors for my events and thought I was ok. This whole thread has me worried about doing another one this winter. Most of the companies were happy to donate once they found out how big BFT is and how many people we reach out to on a daily basis. I would have to agree with you, it is cheap advertisment for those company that want to be involved.
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I personally wouldnt worry about it. Go about your business, save your records, and if the IRS boogey man comes a callin then show'em the paperwork. A registered non-profit just makes it easier if a sponsor wants confirmation. They can't give you a "donation" and write if off if you dont have a registered charity.
They can write it off as an advertising expense. Whats the difference, I don't know, maybe some of the accountants who posted earlier can give an explanation.
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I agree with Lakextackle........I wouldn't be over concerned about this issue!
In order for a business to deduct an expense, by code, it has to be "ordinary and necessary". Giving samples of items from inventory or cash to promote your business arguably meets this test.
I really wouldn't worry about the IRS's position on this issue. I can’t image a revenue agent pursing taxes from the recipients of these items of goods or cash unless the activity was fraudulent. I recall seeing a story of a woman who defrauded people of “donations” she collected claiming she had cancer when she did not. I know the state got involved but I have never heard of the IRS looking for taxes on her deception (even thought they could).
I would focus on compiling with the state registration requirements (if needed) and move on!
If any of those involved with the event prefer discussing this over the phone, feel free to PM me your number and we can discuss further if needed.
Rick
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After reading this post , I thought , this event needs to happen. I sent a message to a good freind who is a retired army guy , and now works as an IRS agent. I thought he might be able to shed some light on this subject. Hopefully he will soon respond, He's a great guy , and I'm sure will be willing to help however he can.
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dubob said he is turning this over to we to run with, I had a tax number I used the last time and I will try to get to use it this time...
I will need lots of help and we need to meet to plain things out , I will post up the time and place as soon as I know the date and time...
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