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IRS playing Grinch again?

by Dave Konkel [Moderator] / December 7, 2006 12:36 PM PST
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see dave they didnt follow the rules
by Mark5019 / December 7, 2006 12:47 PM PST

just a small detail

like if you apply for a grant and dont dot the i your incomplete didnt follow the rules

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Following the rules
by taboma / December 7, 2006 2:43 PM PST

Mark, it still does not mean the intent was not there.
The heck with the IRS and their rulings. Dirt Bags!!!

-Kevin

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rules were in english
by Mark5019 / December 7, 2006 5:14 PM PST
In reply to: Following the rules

as much as i agree there intent was good

where do you draw the line ?

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Why don't they just specify that the money
by Diana Forum moderator / December 7, 2006 9:03 PM PST

is for firefighters killed in fires in Riverside County? That should be wide enough.

Diana

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remember the red cross after 9/11?
by WOODS-HICK / December 7, 2006 9:08 PM PST

many donors complained that the money they gave was not earmarked exclusively for the victims, etc.

The American Red Cross ran up a white flag recently, surrendering to critics who had accused it of bait-and-switch fund raising by planning to hold back more than half of the $543 million it had raised for victims of the Sept. 11 attacks. Officials pledged that just about all of the money (minus $49 million for overhead) would go to the victims for whom it had been given. Red Cross president Bernadine Healy had already resigned from her $450,010 position, but not before suffering a tongue-lashing from Rep. Bart Stupak (D., Mich.). Reporting that some of his constituents had driven to New York City to give the Red Cross a check, Mr. Stupak said, "They expected that check to be used now, not two years from now."-----time to look at the salaries of these charities--450k?!?!?!

unfortunately the irs(I'm no fan) is an involuntary grinch. I can't believe that a chairman of the United Way would not know the regulations. ignorance is putting it mildly, the chairman is incompetent and should be removed.

I also think the United Way should do all in its power to remedy the situation. (if you can pry their fingers from the loot) they should blanket the media and contact the various individuals and groups. if they want their money back, return it.

a new fund then could be set up for this specific situation. with genuine effort this should be resolved. too bad it will take time.

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I don't know, but willing to bet that the IRS purpose
by Roger NC / December 8, 2006 5:48 AM PST

is denying tax deduction for gifts to individuals, which is how they're treating such a small group.

I don't think it's right either, but I'm betting that's the hangup.

If anyone had collected the money and turned it over without a recognized "charity" being involved there wouldn't have been any grounds for IRS to be involved.

Still stinks.

And the money should be returned if at all possible.

Roger

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You would lose that bet...
by Edward ODaniel / December 8, 2006 10:33 PM PST

because ythe IRS is only enforcing the rules and regulations governing charitable organizations.

The only thing that "stinks" is that the Central County United Way either failed to inform whoever of Riverside County requested their handling of donations or that the person making the request failed to understand what Central County United Way personnel told them regarding their limitations.

One simply wonders why the monies were not handled by the county or state Fire Fighter's Association or even the local Union they belong to.

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To express myself better
by Roger NC / December 9, 2006 9:24 PM PST
...because ythe IRS is only enforcing the rules and regulations governing charitable organizations.


The rules basically deny tax deduction status for gifts to individuals, as far as my limited understanding goes.

I figure someone just asked the United way to handle it because that was a group they knew was set up to handle and deliver donations. Or quite possibly because they knew the local directory personally maybe, asked if the group would take over managing the collection and distribution because no one had volunteered to do it (or at least no one considered "above suspicion"?)

And it was probably mishandled, but living in a rural community and knowing people in even more sparsely populated areas that are pretty much run as "a good old boy" network, it doesn't surprised me they were asked to handle it.

Yes I'm sure it's the rules about charitable organizations. Some are laws, some are IRS rules.

It still stinks even if it is technically correct. But that's the problem with laws and rules, just like pure logic, the absolute application sometimes achieves undesirable results. Unfortunately, if you don't apply them, someone will always come along to take advantage for personal gain.

Roger

Roger
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It seems that the problem
by Diana Forum moderator / December 9, 2006 9:40 PM PST

is the deductibility of the gift. If the givers told the United Way to simply deliver the gifts and not worry about the IRS deduction, it probably wouldn't be a problem.

I know that our church will accept gifts for individuals (A Christmas envelope for the pastor, music director, pianist, etc.) and no one says anything. Not as high profile probably.

Diana

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They probably shouldn't do that ...
by Bill Osler / December 10, 2006 2:13 AM PST

My understanding of the IRS rules (as interpreted by my church's auditor) is that gifts are not tax deductible if they are specifically for a certain individual. There are some ifs/ands/buts however that's a fair summary.

A different way of doing this that will sometimes be acceptable to the IRS is to give money to a class of people (eg: missionaries the church supports) along with a separate clear (but non-binding) statement of how you want to church to handle the funds. For example, if I am aware of a situation in which I would like to make a tax deductible contribution to help somebody who is in a crisis I could give a donation to the church's pastoral discretionary fund and then make a separate request to the pastor that he use funds for thus-and-such. The pastor would then have to decide whether or not to honor my request based on the facts of the situation and whether the request was a reasonable use of the church's money. The church is not bound by my request and my understanding is that I can deduct the contribution. If I were to donate money to the church with the stipulation that it be given to a specific person then my understanding is that the church would be bound to honor my request but I would not be able to deduct the contribution.

IIRC it has to do with IRS rules regarding 'private inurement.' The intent is to keep people from using tax exempt charitable organizations to further non-charitable purposes.

Those rules also affect my practice. I am employed by a hospital that is tax exempt so I am not permitted to give away services for arbitrary reasons because of those IRS rules. The hospital has rules for establishing who is entitled to free care and who is not. I have to follow those rules.

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Not to worry...
by C1ay / December 10, 2006 3:51 AM PST
Congress OKs Bill to Send Money to Fallen Firefighters Kin

WASHINGTON ? Congress passed legislation early Saturday to ensure the families of five firefighters killed in Southern California can get more than $1 million in donations despite an IRS snag.

The measure was passed by voice vote in the final hours of the GOP-controlled Congress and now goes to President Bush for his signature.

The legislation would allow the Central County United Way in Hemet to distribute money to the families of the U.S. Forest Service firefighters killed in an arson blaze in October ? even though the organization was not supposed to raise it under Internal Revenue Service rules.

The rules prevent tax-exempt charitable organizations from raising money to benefit individuals, so the United Way risked losing its tax exempt status if it gave out the money.

More.....
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(NT) good
by Mark5019 / December 10, 2006 4:03 AM PST
In reply to: Not to worry...
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and bi-partisan too
by WOODS-HICK / December 10, 2006 10:23 AM PST
In reply to: Not to worry...

It was moved through the Senate by Democratic Sens. Dianne Feinstein and Barbara Boxer, and through the House by GOP Reps. Mary Bono, Ken Calvert and Jerry Lewis, who represent the area.

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