Frequently Requested Information About the Deductibility of Donations Made to the Sean Noland Foundation (SNF), Unreimbursed Expenses Incurred in Performing Services for the SNF and Appropriate Records To Keep To Substantiate the Same

The Sean Noland Foundation is a tax-exempt, 501c3 organization, and therefore donations to the SNF as well as unreimbursed expenses incurred by our volunteers in rendering services to us are generally tax-deductible to the extent that the donor or volunteer itemizes deductions on his/her income tax return.

Persons taking such charitable deductions are required by IRS regulations to keep records to prove the amount of contributions they made to 501c3 organizations like SNF during the year. The kind of records you must keep depends on the amount of your contributions and whether they are cash or non-cash (i.e. in-kind) contributions, and whether they are made in return for something or not (i.e. quid pro quo). The following summary is intended to answer the frequently asked questions that our donors and volunteers have regarding this topic.

DISCLAIMER: By accessing this information, you agree to use it at your own risk and acknowledge that while it is based on our own understanding of current federal rules and regulations, we are not engaged in the business of rendering legal or accounting advice, we are not your counsel, and we neither guarantee nor assume any liability for the accuracy of the information so provided or its fit to your particular tax situation. You should consult your own attorney and/or accountant to determine how the rules apply to your particular circumstances. More detailed information can also be found in IRS Publication 526 (Charitable Contributions) and IRS Publication 561 (Determining the Value of Donated Property) which can be downloaded from the IRS website.

Contributions Consisting of Services Rendered

Contributions consisting of services rendered to a 501c3 organization are NOT deductible and we therefore cannot issue you a tax receipt. These would include legal services, accounting services, veterinary services and administrative services, among others. The logic behind this is that for the donation to be deductible, the phantom income would have to be recognized by the service provider. Depending on the service provider’s adjustable gross income for the year (AGI), that would result in either a wash (i.e. netting zero) or in the donor having to pay income tax, since above a certain AGI, only a portion (and not 100%) of your itemized deductions are actually deductible.

Cash Contributions

Cash contributions include those paid by cash, check, credit card, or payroll deduction. They also include your out-of-pocket expenses incurred in rendering services to SNF. Cash contributions are generally deductible in the year they are made. A few additional rules apply to the deductibility of out-of-pocket expenses and these are explained below. For a contribution made in cash, the records you must keep depend on whether the contribution is (1) less than $250 or (2) $250 or more.

In figuring whether your contribution is $250 or more, you do NOT combine separate contributions. For example, if you give SNF a monthly contribution of $25, your monthly payments do not have to be combined. Each payment is a separate contribution. If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution. If you made a payment that is partly for goods and services (i.e. a Quid Pro Quo donation, as explained below), your contribution is the amount of the payment that is more than the fair market value of the goods and services.

Cash Contributions of Less Than $250

For each cash contribution that is less than $250, you must keep ONE of the following.

1. If the payment was made by check, EFT or credit card, either a canceled check, or a legible and readable account statement that shows:
• If the payment was by check — the check number, amount, date posted, and to whom it was paid,
• If the payment was by electronic funds transfer — the amount, date posted, and to whom it was paid, or
• If the payment was charged to a credit card — the amount, transaction date, and to whom it was paid.
2. If the payment was made in cash, a receipt (or a letter or other written communication) from SNF showing SNF’s name and the date and amount of your contribution.
3. For out-of-pocket expenses we can provide you with a signed Acknowledgment of the services rendered if you use our forms and mail them in for signature. This is not necessary, but does give you better records to substantiate the deduction that you take on your tax returns.
   
   

Cash Contributions of $250 or More

For contributions of $250 or more, IRS rules require that you obtain a written acknowledgement of your contribution from the 501c3 organization (in our case, from SNF office located at 5101 Washington St, STE 8, Gurnee, IL 60031) or that you keep certain payroll deduction records if you made the contribution via payroll. If you make more than one contribution of $250 or more, you must have either a separate acknowledgement for each or one acknowledgement that shows your total contributions. The acknowledgment must indicate the amount contributed and the date the contribution was made, must contain a statement as to whether or not you received any goods or services as a result of your contribution (other than token items and intangible benefits), and if you did, it must contain a brief description of such goods/services and give you the charity’s good faith estimate of their fair market value. We number and keep copies of all receipts issued, so if you did not receive yours or have lost or misplaced your copy, you can contact us and we will mail you a replacement copy.

If you made your contribution by payroll deduction, you do not need a tax receipt from SNF. You should however keep your pay stub(s), Form W-2, or other document furnished by your employer that proves the amount withheld, and if the contribution made was more than $250 you should get a letter confirming that the organization does not provide goods or services in return for any contribution made to it by payroll deduction. We are pleased to provide a confirmation letter when appropriate.

Out-Of-Pocket Expenses Incurred In Rendering Services To the Sean Noland Foundation

You may be able to deduct some amounts you pay in rendering services to SNF. These amounts are treated as cash donations but they do NOT have to be reflected in our books and/or financial results. Per IRS rules, the amounts must be:

• Unreimbursed,
• Directly connected with the services rendered,
• Expenses you had only because of the services you gave, and
• Not personal, living, or family expenses.

Examples include photocopying charges, office supplies, postage used to mail SNF packages or other SNF correspondence, cards used to send SNF thank yous to donors, and certain travel expenses as further described below.

Other Travel & Car Expenses

Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for SNF only if there is NO SIGNIFICANT element of personal pleasure, recreation or vacation in the travel. Note that feeling good about helping our causes, enjoying providing services to SNF generally, and enjoying the trip are allowed and do not affect the deductibility of the expenses incurred. Please note the rules on mileage below.

Deductible travel expenses include unreimbursed air, rail, and bus transportation; out-of-pocket expenses for your car; taxi fares or other costs of transportation between the airport or station and your hotel; lodging costs; and the cost of meals. Please note however, that for car expenses you can deduct only those expenses that are directly related to the use of your car in giving services to SNF, such as the cost of gas and depending on the circumstances, oil, but not general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. You can also deduct parking fees and tolls, whether you use your actual expenses or the standard mileage rate.

You must keep reliable written records of your car expenses and trips. Your records must show for each time you used your car for a charitable purpose, the name of the organization you were serving (in our case, SNF) and the date you rendered the service. If you use the standard mileage rate, your records must also show the miles you drove your car for the charitable purpose. If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to the charitable purpose.

Costs Of Raffle Tickets, Bingo, Lottery, Etc.

Please note that with two exceptions, you CANNOT deduct as a charitable contribution the amounts that you pay to buy raffle or lottery tickets or to play bingo or other games of chance. What the charity chooses to call the ticket payment (donation or otherwise) is irrelevant. The two exceptions that would allow you to deduct the price paid for a raffle ticket as a charitable donation are (1) if you return the ticket to the charity before the raffle is held, or (2) if the charity has a Give Back The Prize option and you elect that as your prize at the time you purchase the ticket. If the charity mistakenly gives you a donation receipt for your raffle ticket purchase and you use it, and your return is later audited, the deduction that you have taken will be disallowed (since it violates IRS rules), potentially resulting in you having to restate your return and pay a penalty for the resulting underpayment