Sounds like a tax issue to me.

If the kids who did the work get all the money then those kids would
have taxable income. If the funds raised are divided among all the
students, then it is arguable that none of them have taxable income.

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<tsargentjr[at]aol.com> wrote:

- quote -

There's the problem, and there's no answer in tax law. It was your friend
who decided to involve the school in the fundraiser rather than going the
traditional route of having the kids beg from friends and family while the
parents hit up coworkers. It seems to me she's now stuck with the school's
decision about what to do with the money, unless the kids haven't turned it
over yet. If they haven't, it's a decision as to how much grief she wants
to cause them at school.
--
Phil Marti
Clarksburg, MD

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PeterL wrote:
- quote -

It does seem attenuated, doesn't it? But it seems to me that it deals
with the application of services and funds for a nonprofit purpose
(assuming the school qualifies - they generally do). Those would be
tax issues for the school, since improper application of funds could
result in various tax-related problems.

Stu

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Perhaps I am confused, but I don't think this has anything to
do with taxes, so I'm not sure this is the right newsgroup in
which to be discussing your question.

I don't think the law or tax code has anything to say about
how the middle school chooses to distribute the founds they
raised during the fundraiser. I see no reason why they can't
use the money to reduce costs for the families that actually
participated and not for those who didn't. This is especially
true given that this is what the headmaster said was going to
happen; it seems rather dishonest for the school to change the
rules after the fact.

Perhaps you are suggesting that by giving the money to only
those families who participated, rather than to everyone in
the class, the school transforms the money from a grant or
financial assistance, to payment for services rendered, i.e.,
income, in which case the kids might have to pay taxes on it.
That's the only angle I can see which might explain your
decision to post your question in this newsgroup.

I don't think that's an issue. It isn't real income, since it
is restricted to a particular purpose and the money will
probably never actually change hands -- it'll just reduce the
amount that those families are expected to pay to the school
for their share of the trip. Furthermore, when a school holds
a fundraiser which is honestly billed as such, the school gets
to decide what to do with the money afterward; giving
preferential treatment to students who helped to raise the
money doesn't turn it into income. A pointed example -- if I
send my kids to a private school, and I can't afford to pay
full tuition, and the school agrees to reduce my tuition in
exchange for me doing some volunteer work for the school, then
I'm pretty sure that I don't have to report that tuition
reduction as income.

A final point worth noting is that even if it IS income, it's
unlikely that the students have enough annual income to make
them obligated to pay any taxes, so it really isn't a big
issue.

In short, I think the school is shafting your friend, they
have no legal grounds for doing so, and your friend should
tell them that she expects them to honor the conditions that
the headmaster laid out before the fundraiser.

--
Help stop the genocide in Darfur!
http://www.genocideintervention.net/

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On Jan 16, 1:24*pm, tsargen...[at]aol.com wrote:
- quote -


How is this a tax question?

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I have a tax question related to school fundraising that I need
answered pretty quickly. Thanks in advance for anyone able and
willing to help.

I have a friend who has two middle school children. The middle school
is planning a trip to Disney. As a way to raise money for the trip,
the students were offered a chance to bag groceries at a local
supermarket. Only a fraction of the kids showed up. My friend's kids
showed up both days and worked the entire time both days. I am sure
you can see where this question is heading.

My friend is the one who set this fundraiser up and the headmaster of
the school told her that the kids who participated would "get" the
money towards the trip. Lo and Behold, when it came to crunch time,
the financial manager at the school said, "Nope, it has to be divided
up between ALL the middle school kids". I know that in a way she is
right but it just doesn't seem totally correct. Her kids have gone
from getting around $200 per kid to $25 per kid based on this
decision.

She doesn't want to do anything against the law but she also doesn't
want to just give away the $175 either. She participated so
diligently because she needs to money to pay for the kids' trips.

Here's how it worked. The kids were told about the opportunity to
raise money for their trips. The kids who showed up were placed at
several aisles where they collected money while bagging the
groceries. Each aisle had a bucket and one or two kids. The buckets
read something like "Donations collected for ABC Middle School Trip to
Disney World". I don't remember exactly what it read - could that be
important in deciding how the money can or cannot be divided?

It just doesn't seem right that this was a voluntary thing and the
kids who didn't want to do it or kids whose parents had plenty of
money or didn't want to bring their kids are reaping the benefits of
those who spent several hours bagging groceries. There has to be some
common-sense "loop-hole to make this fair to the kids who
participated. And I don't use the word "loop-hole" in an illegal or
unethical sense but it was the only word I could think of.

PLEASE HELP!

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