"A.G. Kalman" <agk202[at]netscape.net> wrote:
- quote -

Membership dues are not paid to the ACLU 501(c)(3)
organization to which I have been referring and which
conducts litigation under the regulations I spoke of. The
non-deductible dues are paid to the ACLU's 501(c)(4)
organization which does the lobbying. They are two separate
but interconnected entities. Anything going to the 501(c)(3)
arm is tax-deductible. Anything to the (c)(4) is of course
not.

Timothy E Kelly, Esq.
Certified Specialist, Taxation Law
State Bar of California
Board of Legal Specialization

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Arthur L. Rubin wrote:
- quote -

Membership contributions to the ACLU are not tax deductible.
The membership documents from the ACLU specifically state:
"Membership contributions to the ACLU are not
tax-deductible."

I believe the reason is that the ACLU is a lobbyist and the
funds are used to pay for nondeductible lobbying expenses.
The PLJ membership documents state that contributions are
fully deductible.

--

Alan
http://taxtopics.net

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Timothy E. Kelly, Esq. wrote:
- quote -

I sit corrected.

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

The ACLU and PLJ qualify under IRC 501(c)(3) and
specifically under Treasury Regulation
1.501(c)(3)-1(d)(2)(iii) which provides that the definition
of a charitable organization includes one which is formed
"to defend human and civil rights secured by law." This of
course includes the litigation to which both of these
organizations are dedicated.

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

Their purpose is to benefit the public as a whole, so it
probably comes under the catch-all purpose, "charitable."

Stu

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Stuart O. Bronstein wrote:
- quote -

I thought there was one other subclause of 501(c) to which
contributions are deductible -- but I can't remember what it
was. I can't see how the ACLU or PLF (Pacific Legal
Foundation) would qualify under 501(c)(3).

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

I would imagine so, though the expense and effort required
to set up a nonprofit and get IRS approval might not be
worth it for an individual.

- quote -

All the organizations described in 501(c) are exempt from
the standpoint that their income is not subject to taxation.

But only for those organizations described in 501(c)(3) can
donations be deducted (unless otherwise deductible under
some other section such as business expenses). See IRS
section 151(c)(5)(B) (ii)(I).

Stu

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smithff33[at]aol.com (Herb Smith) wrote:
- quote -

United Way and the other kinds of things you are talking
about all involve payments to other qualified nonprofits,
which is certainly an easier case to prove. But it's not
required.

The umbrella organization is only required to determine that
paying out money would be pursuant to its exempt purpose.
If it's not they're not allowed to do it. So in general
you're right, because payments to an individual would not
often be within the exempt purpose of a charitable
organization. But there might be situation in which it
might be appropriate.

Stu

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"Stuart O. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

If the umbrella organization is something like United Way,
and you direct your donation to one or more of the
subsidiary charities, no problem. Likewise, donations to a
college, where the donation is directed to a particular
department or program, are OK. To stipulate that the
donation be directed to an INDIVIDUAL's benefit (tuition
payment, etc) would not qualify in my book.

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Milton Baker wrote:

(quoting section 501 through (c)(3).)

I see your point. However -- a 501(c)(3) to pay medical
expenses of (say) all sufferers of (pick your rare disease
here -- I have one in mind, but I can't spell it) at
a particular hospital seems valid even if there is only
one such person.

(Some of the examples I had in mind would have been
deductible under a different clause of 501(c).)

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smithff33[at]aol.com (Herb Smith) wrote:
- quote -

I don't know about the situation of churches in particular,
but nonprofits are often given gifts with strings attached,
and those contributions can still be charitable
contributions.

For example there are umbrella organizations qualified under
section 501(c)(3), that accept donations for distribution to
others (generally smaller groups) that use the money for the
exempt purpose of the umbrella organization. In this kind
of case qualification of the smaller organization to the
satisfaction of the larger one must usually be done in
advance. But it is certainly done, and often.

Stu

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

Sec. 501. - Exemption from tax on corporations, certain trusts, etc.

(a) Exemption from taxation
An organization described in subsection (c) or (d) or
section 401(a) shall be exempt from taxation under this
subtitle unless such exemption is denied under section 502
or 503.

(b) Tax on unrelated business income and certain other
activities
An organization exempt from taxation under subsection (a)
shall be subject to tax to the extent provided in parts II,
III, and VI of this subchapter, but (notwithstanding parts
II, III, and VI of this subchapter) shall be considered an
organization exempt from income taxes for the purpose of any
law which refers to organizations exempt from income taxes.

(c) List of exempt organizations
The following organizations are referred to in subsection (a):

(1)
Any corporation organized under Act of Congress which is an
instrumentality of the United States but only if such
corporation -

(A)
is exempt from Federal income taxes -

(i)
under such Act as amended and supplemented before July 18,
1984, or

(ii)
under this title without regard to any provision of law
which is not contained in this title and which is not
contained in a revenue Act, or

(B)
is described in subsection (l).

(2)
Corporations organized for the exclusive purpose of holding
title to property, collecting income therefrom, and turning
over the entire amount thereof, less expenses, to an
organization which itself is exempt under this section.
Rules similar to the rules of subparagraph (G) of paragraph
(25) shall apply for purposes of this paragraph.

(3)
Corporations, and any community chest, fund, or foundation,
organized and operated exclusively for religious,
charitable, scientific, testing for public safety, literary,
or educational purposes, or to foster national or
international amateur sports competition (but only if no
part of its activities involve the provision of athletic
facilities or equipment), or for the prevention of cruelty
to children or animals, no part of the net earnings of which
inures to the benefit of any private shareholder or
individual, no substantial part of the activities of which
is carrying on propaganda, or otherwise attempting, to
influence legislation (except as otherwise provided in
subsection (h)), and which does not participate in, or
intervene in (including the publishing or distributing of
statements), any political campaign on behalf of (or in
opposition to) any candidate for public office.

Milt Baker CPA

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Harlan Lunsford <hlunsfordns[at]bellsouth.net> wrote:
- quote -

If the "gift" to the church has STRINDS ATTACHED, it is not
a charitable donation.

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Stuart O. Bronstein wrote:

- quote -

If that were true, then contributions to all those bank
account "trust" funds set up to help particular people meet
life's necessities, (thinking chiefly of people who have
lost their house to fire) would be tax deductible.

Or, maybe I could form a small one to benefit my clients in
case their house catches fire. Sort of like the "hearts
and flowers' funds of local major employers, to which I
always tell clients their voluntary contributions to these
funds are not tax deductible.

Heck, I'm getting confused now.

Christmas Cheer$,
Harlan Lunsford, EA n LA

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Stuart O. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

It's not going to be worth doing that, given my tax bracket
and the amount of the donations. Thanks for the idea,
though. It might be useful in the future.

--ron

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Arthur L. Rubin wrote:

- quote -

One further thought or question then. Instead of a 501c3,
what if the organization were a church and the donor, a
prominent and major town employer gave the church say 500$
with the stipulation it be given to one of it's employees?

Christmas Cheer$,
Harlan Lunsford, EA n LA

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Arthur L. Rubin wrote:

- quote -

For the SOLE purpose of benefiting one individual? How on
earth then did IRS allow their status? Don't make sense.

Christmas Cheer$,
Harlan Lunsford, EA n LA

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"Vernon V Chatman III" <vernonchatmaniii[at]earthlink.net> wrote:
- quote -

So if the contributions will be large enough over time, it
might make sense to set up a nonprofit organization for that
purpose.

Stu

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

As long as the contribution goes to a particular fund with
an exempt purpose, it may well be deductible. My
recollection (though I haven't looked at this in several
years) is that IRS approval of tax exempt status is not
required if less than $5,000 per year is taken in.

Stu

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Harlan Lunsford wrote:
- quote -

I question this last phrase. There have been 501(c)(3)
organizations formed to pay the legal or medical expenses
of a particular individual. It seems to be allowable
as long as excess contributions are donated to another
(preferably similar) exempt purpose. It doesn't matter,
in that case, whether the you know the individual.

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