In article <g3e08a$7io$1[at]reader2.panix.com> ,
Dick Adams <rdadams[at]panix.com> wrote:

- quote -

Of course not. Give money to $COLLEGE to be used for scholarships
(for students to buy books). The ultimate recipient isn't the
non-profit college, it's the student (or a for-profit bookstore).

Seth

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rdadams[at]panix.com (Dick Adams) wrote:
- quote -

The answer is clearly no. Charitible organizations receive money
because they need it to perform their exempt functions. That means
paying for things to those who are not themselves exempt (including
employees).

In this context the services need only benefit the exempt organization
in some substantial way, and not be primarily for the donor's own
personal benefit.

Stu

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dpb <none[at]non.net> wrote:
- quote -

Perhaps he should have written "part of that money may be
paid to non-exempt organizations" for operating expenses
which is exactly your point.

In the context of this thread, the issue is whether or not
the ultimate recipient of cash and/or out-of-pocket costs
of rendering services needs to be an exempt organization.

Dick

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removeps-groups[at]yahoo.com wrote:
....
- quote -

That is not "diverted", that's simply paying expenses of operating the
organization (and is fully qualified as long as they are using the
vehicles or obtaining the services in support of their mission).

"Diversion" would be sending chunks of contributions to individual(s) or
other organizations for their own use in ways that do not further the
direct objectives of the 501(c)(3). Folks get in trouble for this all
the time, particularly those who set up "charities" specifically w/ the
intent of skirting the rules so as to actually be profit-makers for
themselves (the scam of individual churches is a prime example).

--

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"removeps-groups[at]yahoo.com" <removeps-groups[at]yahoo.com> wrote:

- quote -

It is all supposed to go to support the exempt function. If you need a
CPA to comply with GAAP or tax laws, if you need furniture for the
nonprofit to function, if you need to buy gas so you can drive
somewhere to perform the exempt function, all those support the
organization's function and are permitted. If some of it is paid to
someone's child as a bribe to make sure his homework is done, that's
not within its exempt purpose, and the person causing that to happen
could be required to pay the money back.

Stu

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On Jun 17, 10:21 pm, Stuart Bronstein <spamt...[at]lexregia.com> wrote:
- quote -

In any case, when you donate to a regular 501(c)(3), part of that
money may be diverted to non-exempt organizations. For example, part
of your $100 donation to Red Cross would be used to buy gasoline for
their cars, part for office furniture from a for profit store, part
for a CPA, etc. Yet the $100 donation is allowed in full.

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Tom Russ <tar[at]isi.edu> wrote:
- quote -

In some cases yes, but not necessarily all. If what they do supports
the main core of the nonprofit's purpose, then that kind of
generalized good work might allow those who do it to deduct their
expenses. But if it's fairly tangential the answer is probably not.

In one case a court said that evangelists for the Mormon Church were
not directed, controlled or supervised by the church. Still, that
was considered to be an important core purpose of the church as a
whole, and the expenses incurred in evangelizing were allowed.
Smith, 60 TC 988 (1973).

- quote -

That's not a benefit to the organization but doing something on
behalf of the organization that is within its exempt purpose. If it
looks like the trip is done primarily for the benefit of the kids and
primarily to satisfy its exempt purpose, it may well be ok. But if
it looks like an excuse to take a vacation, the IRS will deny it.

Stu

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dpb <none[at]non.net> wrote:
- quote -

Basically you're disqualified if you do things you're not supposed to
do. Go read those code sections yourself and they will refer you to
others. You can find it here: http://www4.law.cornell.edu/uscode/
In the blanks they ask you for title number and code number. Code
number is obvious, title number is 26.

- quote -

It really depends on the specific circumstances. If the earmarked
purpose fits within the organization's exempt purpose and no donor
gets a personal benefit from it, it's normally not a problem.

In this case the real issue is whether or not the beer judges are
doing something that supports the judging organization, or just doing
something that supports the beer contests. The impression I have
from what Dick said is that the beer contests pay the nonprofit to
supply certified judges, and to certify the contests. Because of
that, working as a beer judge has a direct benefit to the nonprofit
because it gets them money. When you do something that has that kind
of direct benefit to a nonprofit, the costs you incur to do it may be
deductible.

Stu

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On Jun 17, 2:40*pm, Stuart Bronstein <spamt...[at]lexregia.com> wrote:
- quote -

I suppose this turns a bit on what "benefit somehow" really means.

It would seem to me, as a layman, that the nonprofit would not have to
directly benefit, in the sense of getting a tangible benefit, such as
money. It would seem that having their charitable purpose furthered
(in their name) would suffice. Would you agree with this?

I mean, if say, a volunteer with an eligible youth group incurred
expenses to take the members on an appropriate outing, that would be a
deductible expense, even if the youth group organization itself didn't
directly benefit. But the outing would be furthering the purpose of
the organization, right?

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Stuart Bronstein wrote:
....
- quote -

Can you summarize those in a nutshell?

I'm curious as the training I keep referring to implied to me that some
fund raising activities can be non-deductible because funds can be
earmarked for specific activities or in conjunction w/ some other
organizations. Those seemed similar enough to the case of the contests
being organized by others than the organization of which Dick is a
member as to make it dependent on what the charter actually says and
whether they really are qualified or not...

- quote -


Not sure what you're driving at here--I was simply agreeing w/ you that
the amount of time involved actually judging, etc., would have to
satisfy the reg's which I shorthandedly referred to as the sensibility
test. (As in, one of the examples of non-deductible travel was one of
essentially pleasure yachting w/ a little whale or other
species-counting on the way).


--

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dpb <none[at]non.net> wrote:
- quote -

Sort of. If it qualifies under §501(c)(3) contributions to it are
presumptively deductible, unless the organization doesn't meet the
requirements of §501(a) and §170(c).

- quote -

That's not my test, that's the regulation. The only thing I had to
read into that was that the nonprofit had to benefit somehow from the
services performed for which the deduction is sought.

Stu

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Stuart Bronstein wrote:
....
- quote -

This is only indirectly related, but the question raised a related one
in my mind --

I read the above earlier and wondered but could find no
clarification--is _any_ organization which is 501(c) (3) an
"organization contributions to which are deductible" solely by virtue of
being that?

To bring it back to the point of the thread ( ); if yes, I agree w/
Stu providing the "sensibility" test is passed.

--

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

Hopefully, your fee is less than Harlan's. But two letters
are better than one. <g
Dick

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rdadams[at]panix.com (Dick Adams) wrote:
- quote -

I've looked into this issue briefly. If the nonprofit receives fees
for sanctioning the event, and part of that is based on supplying
qualifying judges, it seems to me that the travel expenses may well
be deductible.

See Reg. 1.170-2(a)(2)"

"No deduction is allowable for contribution of services. However,
unreimbursed expenditures made incident to the rendition of services
to an organization contributions to which are deductible may
constitute a deductible contribution. For example, the cost of a
uniform without general utility which is required to be worn in
performing donated services is deductible. Similarly, out-of-pocket
transportation expenses necessarily incurred in rendering donated
services are deductible. Reasonable expenditures for meals and
lodging necessarily incurred while away from home in the course of
rendering donated services also are deductible. For the purposes of
this section, the phrase while away from home has the same meaning as
that phrase is used for purposes of section 162."

I think I can find the time to write the opinion for you.

Stu

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Dick Adams wrote:
- quote -


ChEAr$,
Harlan

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Seth <sethb[at]panix.com> wrote:
- quote -

Thank you. What I need is a Circular 230 preparer to write
a covered opinion to that extent.

Dick

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In article <g36qdo$96s$1[at]reader2.panix.com> ,
Dick Adams <rdadams[at]panix.com> wrote:

- quote -

So the purpose of your travel is to support the goal of the 501(c)(3)
organization? Do you meet all the criteria required for deducting
charitable travel (e.g. spend sufficient time each day on the
charity's business rather than your own recreation)? In that case,
I'd say it ought to be deductible.

Seth

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Dick Adams wrote:
....
- quote -

Think would have to see what charter of the organization says about its
mission and how this fits as well as what the disposition of the income
from these fees is. I'm still feeling "not so much" based on the
presentations been given as noted before but they didn't cover precisely
this situation, granted.

To me, that the organization isn't listed is somewhat telling; I noted
in reading the IRS doc's there's an 800 number that says one can call as
a prospective donor to find out if any organization is a qualified one.
Whether there's more to that than the phone-monkey looking up the web
copy of the list I don't know. I guess it would be of some interest if
you were to call and see what they said (although maybe you don't want
to know ). I thought I had copied it to paste before I closed the
window but seem to have not done so successfully, sorry...

--

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removeps-groups[at]yahoo.com <removeps-groups[at]yahoo.com> wrote:
- quote -

That is not going to happen.

The 501(c)(3) earns 99%+ of its revenues from fees for
certifying judges and sanctioning competitions which
it then advertises to its members as volunteer
opportunities. On the face of it without any additional
paperwork, are the reasonable travel and lodging expenses
of the judges deductible as a charitable contribution
even though the organizers (who rarely make a profit) are
not 501(c)(3)'s?

Dick

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On Jun 13, 2:55*pm, Harlan Lunsford <hnslunsf...[at]bellsouth.net> wrote:

- quote -

The IRS granted them 501(c)(3) status, so contributions to it are
deductible. Whether it should be a 501(c)(3) in the first place is
another issue, but not one I think we have to worry about.

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