Tax write off

[BadenP]

Beavah you are beginning to remind me of good ole Bob White. Look believe whatever you want cuz I'm through with trying to get through that thick head of yours full of self rightgeous nonsense. I no longer work for the IRS so I have nothing to prove to you or try to convince you of anything. I have seen first hand how not understanding tax law properly has cost people everything they had and after some years of that carnage I left the IRS. I hope you never get audited because I am sure you would lose big time. As far as this topic is concerned I am done posting rebuttals to you and your nonsense.

[hotair36]

Vicki: You are right about what should happen if a 1099 appears with the CO's number on it. My comment concerning the use of the EIN/TIN of another entity was in the context of a unit sponsored by a charter partner such as a veterans service organization which often has non exempt income from things like a club room operation, facility rentals etc. Some of these sponsors have substantial revenue and are becomming an audit target.

 

We know that it should not be done but some units, especially new units, want to open a checking account as soon as they have collected the initial dues and registration fees to submit with a charter application. They have not obtained a EIN/TIN for the unit and will use the treasurer or unit leader's TIN (SSN) to open the new account and then they forget about it. If they have an account that might earn interest and are successful in any future fund raising efforts an IRP transcript would show unreported income for the TIN on record with the financial institution. I admit this isn't likely to happen but, what if a few years down the road the unit leadership changes and the unit suddenly does have earnings from the account? The TIN associated with the account will show as the recipient of the earnings. I doubt that most leaders who might get a 1099 from this scenario would be savvy enough to then issue a 1098 showing the correct recipient.

The best solution is for each unit to obtain its own EIN/TIN via the IRS Tele-Tin phone line or web site.

 

[evry]

Can I ask the two ex-IRS agents how they view the "qualified" language in 501©(3). In my interpretation, an organization does not need to have received approval from the IRS to be qualified, but if an organization does have such approval, then it is deemed to be qualified.

 

Granted that some organizations (ie. evry's charity) will receive scrutiny and should apply for qualification, but others, like recognized churches will be looked at as qualified under the tax code whether or not they have applied for qualification. I place any Boy Scout Troop in this second category.

 

What say you?

[FScouter]

IRS has pretty much already defined "qualified" so there is no need for Joe Taxpayer to interpret. From pub 526:

"You can deduct your contributions only if you make them to a qualified organization. To become a qualified organization, most organizations other than churches and governments, must apply to the IRS."

The org you donate to will be able to tell you whether or not they have applied and received approval from IRS.

 

Any further clarification is found in the 24 pages of pub 526.

[DancesWithSpreadsheets]

I say that a forum like this is a bad place to go looking for tax advice, especially in a spcialized area such as tax exempt organizations.

 

FWIW, it is true that generally, churches are not required to file for tax exempt status, but the IRS form used to make an application for TE status (Form 1023) includes instructions and schedules specific to churches, so apparently the IRS thinks it's a good idea.

 

Most other organizations must file an application in order to be recognized as tax exempt under IRC 501©(3). Treasury Regulations section 1.501-1(a)(2) states:

(2) An organization, other than an employees' trust described in section 401(a), is not exempt from tax merely because it is not organized and operated for profit. In order to establish its exemption, it is necessary that every such organization claiming exemption file an application form as set forth below with the district director for the internal revenue district in which is located the principal place of business or principal office of the organization.

 

I'm not sure of this but I'm guessing that Churches get a pass due to the "establishment of religion" clause in the Constitution.

 

This post is provided for information only and should not be considered tax advice. Consult a competent tax professional is highly recommended before acting based on this information.

 

Regards,

DWS

[Oak Tree]

"I place any Boy Scout Troop in this second category [as a group that will be looked at as qualified under the tax code whether or not they have applied for qualification.]"

 

Again, not official tax advice, but no, that is not correct.

 

A Boy Scout troop is not a legal group - it will take its tax-exempt status from its chartered organization.

 

Churches are indeed automatically tax exempt due to the U.S. Constitution. Quoting the IRS, Congress has enacted special tax laws applicable to churches, religious organizations, and ministers in recognition of their unique status in American society and of their rights guaranteed by the First Amendment of the Constitution of the United States.