[17801] in APO-L
Re: Tax Exempt Inquiry
daemon@ATHENA.MIT.EDU (Ping Huang)
Thu Nov 27 19:47:49 1997
Date: Thu, 27 Nov 1997 16:45:56 -0800
Reply-To: Ping Huang <pshuang@MIT.EDU>
From: Ping Huang <pshuang@MIT.EDU>
To: Multiple recipients of list APO-L <APO-L@VM.CC.PURDUE.EDU>
In-Reply-To: Your message of "Wed, 26 Nov 97 02:06:13 EST."
<199711260707.XAA21388@deliverator.sgi.com>
Vivs Scott Laliberte <lalibr@RPI.EDU> wrote:
> As a tax exempt org, what are the regulations as far as people
> writing off donations of $s or services to APO chapters? Anyone
> out there dealt with this in an official capacity? Technically,
> as I read the docs pointed to before, you need to be a "charitable" group,
> but no place do they define what that is... anyway, lookin for input
Is the particular issue whether you donated to specific *chapters*
vs. to the national organization? Just trying to clarify. Do most
chapters even exist as their own separate legal/fiscal entity from the
point of view of the IRS? When Alpha Chi chapter has cared about its
501(c)(3) status as a tax-exempt organization, we actually
piggy-backed off the university's tax-exempt status because it was
easier to get the appropriate paperwork from the university, and local
merchants recognized MIT as a 501(c)(3) far more readily than they
would have recognized APO anyway.
As for services vs. money, IRS's position on donation of services is
that basically you can't deduct the value of services you donate.[*]
DISCLAIMER: I'M NOT A TAX ATTORNEY.
Personally, direct donations to nationals and the mileage[**] driven
to APO events is about all I'm going to deduct from my taxes....
Other travel and incidental expenses are more questionable to justify,
and for me don't amount to enough that I would care (although those
who travel more than I do might find it worth their while, I suppose).
--
Ping Huang <pshuang@mit.edu>; more info: http://web.mit.edu/pshuang/.plan
Disclaimer: unless explicitly otherwise stated, my
statements represent my personal viewpoints only.
[*] The argument seems to be along the following lines: suppose you
are a professional photographer who usually charges $100/hour. In
scenario A, you act as photographer for an event sponsored by your
charity for one hour and charge nothing. In scenario B, you book an
extra gig and earn an extra $100. You donate that cash to your
favorite charity, who turns around and hires somebody else to be
photographer at the aforementioned event. At the end of your year,
your gross income is greater by $100, but your deductions, assuming
you itemize, is also greater than $100, so the amount of tax you pay
that year is roughly unchanged (modulo messy issues like
self-employment and other non-income taxes, the phasing out of
deductability of certain items as gross income increases, etc.)
The charity made out equally well in both scenarios; it would be odd
if you were able to do better from a tax point of view in one scenario
than the other. (That charitable donations are deductible at all is
an example of social engineering via tax code: charitable work funded
by direct individually targeted donations from members of the American
public is generally deemed a good thing, so it is financially
supported by the tax code. Hence how well the charity made out is a
relevant question to ask.) The way to make the two scenarios as close
to being equivalent as possible from the point of view of your taxes
is to make the services you rendered in scenario A non-deductible.
QED, your donated services are not deductible.
There's also the much simpler argument that allowing donated services
to be deductible would be clearly something that could easily be
heavily abused.
[**] The standard 12 cents per mile deduction is a savings of about
3-4 cents per mile, depending on one's tax bracket. I spend that on
gas alone, much less repairs and other supplies and vehicle
depreciation. Whereas non-work-commute driving for business is
deductible at a standard rate of over 30 cents per mile. Sigh;
there's clearly a double standard at work here....
