Posts Tagged ‘donations’

“Crowdfunding” – Are The Funds Taxable?? Do You Need To Keep Business Records??

Monday, March 21st, 2022

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

“Crowdfunding” is one of several Internet-based activities in which parties can receive funds from entities and individuals whom they have never met, or do not know.  There are websites that specialize in these activities.  Suppose you received a 1099-K  [“Payment Card and Third Party Network Transactions”]  What do you need to do?  What actions are you required to do?

Have you been keeping accurate business records from Day One?  Will your business records meet or exceed the IRS standards?  Recordkeeping | Internal Revenue Service (  Were the funds considered to be “gifts” or did you provide material, products, or services in exchange for the “gifts” or “donations”??


Fraudulent Charitable Organization Donation Scams

Wednesday, November 27th, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

Depending on your opinions regarding the adverse weather effects of “global warming”, globally we are continuing to see and experience extremes of weather conditions which are causing tremendous amounts of property damage, and significant numbers of deaths and injuries.  Often U. S. citizens feel compelled to make a donation to the humanitarian relief efforts to aid those victims and provide financial assistance.  The assumption that follows is that surely their donation must be to an IRS approved charitable organization, and that the donation can be deducted on their (personal  or business) tax returns for that year. 

However, this assumption could be incorrect.  IF you claim a deduction for a donation to an organization that has not been approved by the IRS, or for which the IRS has revoked their tax-exempt satus, you could subject your tax returns to an audit or review by the IRS.  Based on past experiences, these “tax scam” organizations may use one or more of the following schemes:

The scams use different tactics. Offering charity relief, criminals often:

  • Claim to be with real charities to gain public trust.
  • Use names which are very similar to legitimate charities.
  • Use email to steer people to bogus websites that often look like real charity sites.
  • Contact people by phone or email to get them to ‘donate’ money or give their financial information. 

 Before you may any donation, perform your own “due diligence” activities to confirm that you are sending your money to a bonafide charity.

1.  Go to the Internet, use your search engine, and verify the authenticity of the organization;

2.  Contact the Better Business Bureau ( or (

3.  Go to the IRS website ( and use the “Exempt Organization Select Check” tool to locate bonafide charities.  Remember, the website may not have all of the latest organizations.  If you can not locate the one for which you are searching, call the IRS at 1-800-829-3676 or 1-800-829-1040. 

4.  If you can not satisfy yourself that the organization is a bonafide entity after completing steps #1-3 above, DO NOT make the donation!  It is most likely that it is a scam operation and that your donation will personally enrich one or more individual people. (more…)