Charity begins at home – on your computer!

June 03, 2014 by Carol Thompson, EA
change button on a keyboard

Did you feel motivated to give money to an organization after the last hurricane/tornado/flood/fire?

Did you get a phone call, email, personal appeal by someone you do not know?

Were you told that all of your money would go right to the victims?

Are you sure the group is even a legal charity?

Did you give that person your credit card or checking account information? (Watch for upcoming articles about Identity Theft!)

Fraud comes in all shapes and sizes. One particularly spurious scam is claiming to be a non-profit after a major disaster and collecting money on the internet for the “victims.” However, often the only victim involved is you! Taxpayers need to be especially careful when giving money to an organization, no matter how official the name sounds. If there is a well-known movie star pitching the Red Cross on NBC, there is probably a good chance the number is OK. If you get a cold call at 10 PM asking for your credit card, be wary, be very wary.

The IRS website is an excellent source to verify non-profits. All you need is the name of the charity and the city. Churches and some of their affiliated organizations are not always listed on the site. Also, government units are not listed – but contributions to them are still tax deductible. If you make a donation to an organization that is exclusively for public purposes, such as a public library, or a city fund to provide oil to needy families, the donation is tax deductible. In fact, you can even donate money to the United States by sending a check to the U.S. Treasury.

Verify here that a non-profit exists.

  • A box will come up with “EO Select Check (Pub. 78 data)” Click on the hyperlink.
  • The next screen is titled “Exempt Organizations Select Check”
  • Check the circle for “Are eligible to receive tax-deductible charitable contributions;”
  • Fill in the information – you do not need all of it! You need the name, if possible. Fill in the city and state if you know them.
  • Click the SEARCH button, and a list appears by name or city.
  • The list may not include the exact name you put in. Some non-profits incorporated under different names, so you may need more information.
If the organization is on the list, your contribution should be fine. If not, you may want to ask more questions before turning over your charitable dollars – or deducting the contributions on your tax return. If the organization is not a legal non-profit, it is not deductible.


Recent Articles

New Jersey flag over cash
If you estimate that you will owe more than $400 in New Jersey income tax at the end of the year, you are required to make estimated payments.
Audit Compass
IRS Letter 525 is sent to let you know that your tax return was reviewed. A wise taxpayer should proceed with caution, yet swiftly, from this point forward.
Cash and coins spread out on a table
Both a tax deduction and a tax credit reduce the amount you may owe on your return, and possibly increase your refund. But how they get there is different.
Two model houses and stacks of money
An IRS levy is the actual seizure of property you own. An IRS lien is a public document that notifies any creditors that the IRS has a right to your property.
This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.