[Plug-security] OT: PLUG, ABLEConf, State and Federal Taxes and YOU

Lisa Kachold lisakachold at obnosis.com
Tue Feb 1 08:47:13 MST 2011 

*While the whole charitable donation subject and process for soliciting
donations for both ABLEConf and PLUG (which, granted are quite different
orgs) and for Volunteers claiming a tax credit or equipment donations,
claiming a tax credit needs to be addressed formally, and recommendations or
best practices to members and volunteers needs to written up and displayed
on the volunteer section of the PLUG website, this post at tax time can
assist you.*

*ARIZONA LEGAL Summary:  *

A) Neither the PLUG, nor ABLEConf are 501c designated community action
agencies. (Estimated DIY ost to obtain $1,000 fees, etc.) 1 below. below.

B) Neither the PLUG nor ABLEconf have open public budgets.  Part of A above
requires election of a board, and treasurer. Neither the PLUG nor ABLEconf
spend 50%of budget on services to Arizona residents. [Unknown see B above]

C) Neither the PLUG nor ABLEconf have planning budgets, fund raising events
or submit events for TANF (Temporary Assistance to Needy Families, however
we could easily do so, should we be able to take 501c equipment
contributions, for computer recycling.

D) Neither the PLUG nor ABLEconf can submit a the Department of Revenue
letter


We could possibly get a charter as a "feeder organization" from LPI, ScALE,
or LOPSA, however, I believe they will also require standard accounting and
more.  It might just be easier to DIY our own non-profit.

Non-profit status would allow us to:

0) Have elected or appointed Board members designated for various ongoing
responsibilities (so President [aka King] Hans doesn't have to do everyone
[or nothing which is what is required in a non-profit, yet fails to grow
because of limitations]])
1) Hold fundraisers
2) Reimburse people for tee-shirts, equipment purchases for events, or at
least provide a budget for BIG events and let they do as they will; since we
would be able: (see 3)
3) Provide tax write offs for volunteer time, equipment, cash donations and
mileage
4) Provide grants to youth for various purposes
5) Provide Scholarships to Member Classes or ASU?

*Current Needs:*

Of course we currently need:

0:  a volunteer center for the PLUG both on the website (file and
information sharing and in he real world where we can lock up equipment. I
will set that up today in drupal).
1) Buy in and assistance from Der Hans for starting the Non-Profit Project
fundraisers and putting together the court papers for both ABLEConf and plug
(need address, [Han's house or business will do fine, but a P.O. Box is
optimal].

From: http://www.azdor.gov/About/FAQs/QualifyingCharitableOrganization.aspx


*References Regarding Volunteer Status Taxes and Benefits   *


A charitable organization must submit written certification on a prescribed
application form to
the Department of Revenue along with other information and documents. To
view the form
and detailed instructions, click
here<http://www.azdor.gov/LinkClick.aspx?fileticket=BFl4fNNzpok%3d&tabid=133>
.

The charitable organization must:

1) be a charitable organization that is exempt from federal income taxes
under Section
501(c)(3) of the Internal Revenue Code or is a designated community action
agency that
receives community services block grant program monies pursuant to 42 United
States Code
Section 9901.

2) Spend at least fifty percent of its budget on services to Arizona
residents who receive
Temporary Assistance for Needy Families (TANF) benefits or to Arizona
resident low-income
households or to chronically ill or physically disabled children who are
Arizona residents.
“Services” means cash assistance, medical care, child care, food, clothing,
shelter, job
placement and job training services or any other assistance that is
reasonably necessary to
meet immediate basic needs and that is provided and used in this state.

3) Provide financial data indicating the organization’s budget for the prior
operating year and
the amount of our budget spent on services to residents of Arizona who
either receive
Temporary Assistance of Needy Families (TANF) benefits, are low income
residents of Arizona
or are chronically ill or physically disabled children and

4) State that the organization plans to continue spending at least fifty
percent of the budget in
the future on services to residents of Arizona who receive Temporary
Assistance of Needy
Families (TANF) benefits, are low income residents of Arizona or are
chronically ill or physically
disabled children.The organization must also notify the Department of any
changes that may affect its
qualifications. The certification or change letters should be mailed to:

Arizona Department of Revenue
Office of Economic Research and Analysis
1600 W. Monroe
Phoenix, AZ 85007
*Excerpt:*:
*Charitable Contributions Tax Credit: If you are donating to a charity, you
have to itemize deductions on your Arizona return in order to get this tax
credit. *

You can't just pick any non-profit organization. To qualify for this tax
credit, a charity to which you would contribute must spend at least fifty
percent of its budget on services to Arizona's residents who are considered
working poor. You don't have to find that out for yourself; each charity
knows if they qualify for the tax credit. Most of them will indicate this on
their web site if they are. The organization may also have a form for this
contribution* or online payment system*. You can often find the annual
report online to take a look at how the money at that organization is spent.
Even if the charity's web site doesn't have the information, you can call
them to get it. The important issue here is that for you to receive the tax
credit, the organization must be able to provide a copy of the certification
letter from the Arizona Department of Revenue. Once you know that the
organization you support is certified, then you can make the contribution
and take your Arizona tax credit when you file your tax return.
Charitable Contributions Tax Credit If you are donating to a charity, you
have to itemize deductions on your Arizona return in order a charitable
contribution deduction (get this tax credit).

You can't just pick any non-profit organization. To qualify for this tax
credit, a charity to which you would contribute must spend at least fifty
percent of its budget on services to Arizona's residents who are considered
working poor. You don't have to find that out for yourself; each charity
knows if they qualify for the tax credit. Most of them will indicate this on
their web site if they are. The organization may also have a form for this
contribution or online payment system. You can often find the annual report
online to take a look at how the money at that organization is spent. Even
if the charity's web site doesn't have the information, you can call them to
get it. *The important issue here is that for you to receive the tax credit,
the organization must be able to provide a copy of the certification letter
from the Arizona Department of Revenue*.

Excerpt::

Once you know that the organization you support is certified, then you can
make the contribution and take your Arizona tax credit when you file your
tax return.

If you don't have time to check out all the individual organizations that
might qualify, and you don't have a favorite qualifying charity in mind,
there are umbrella organizations, like United Way, where you can donate the
money and they will distribute it.

 Abuse includes arrangements to improperly shield income or assets from
taxation and attempts by donors to maintain control over donated assets or
income from donated property. The IRS also continues to investigate various
schemes involving the donation of non-cash assets including situations where
several organizations claim the full value for both the receipt and
distribution of the same non-cash contribution. Often these donations are
highly overvalued or the organization receiving the donation promises that
the donor can repurchase the items later at a price set by the donor. The
Pension Protection Act of 2006 imposed increased penalties for inaccurate
appraisals and set new definitions of qualified appraisals and qualified
appraisers for taxpayers claiming charitable contributions.

Donors donating in-kind goods and claiming significant deductions for the
contribution should expect extra scrutiny this year.  Generally, donations
of property (other than cash, inventory, publicly traded stock, or
intellectual property) in excess of  $5,000 require qualified appraisal.
Also, any single item of clothing or any household item that is not in good
used condition or better and for which the donor deducts more than $500
requires a qualified appraisal. The appraisal must meet the definition of a
“qualified appraisal” which requires specific information to be included and
must be prepared by a qualified appraiser who meets certain qualifications.
If the donor does include the appraisal with his or her tax return or if the
appraisal does not meet the specific criteria for a “qualified appraisal,”
the donor cannot deduct the contribution. The qualified appraisal and
qualified appraiser rules impose high standards that are extremely specific.
Care should be taken to ensure the appraisal and appraiser meet these
standards.

Additional resources:

http://www.azdor.gov/About/FAQs/QualifyingCharitableOrganization.aspx

http://charitylawyerblog.com/2010/03/30/abuse-of-charitable-organizations-and-deductions-included-in-2010-dirty-dozen-tax-scams/


   - Categories
      - Acquisition<http://charitylawyerblog.com/topics/collaboration/acquisition/>(2)
      - Annual Reports<http://charitylawyerblog.com/topics/arizona-corporation-commission/annual-reports/>(2)
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Exemption<http://charitylawyerblog.com/topics/application-for-exemption/>(9)
      - Arizona Corporation
Commission<http://charitylawyerblog.com/topics/arizona-corporation-commission/>(2)
      - Arizona Nonprofit
Corporations<http://charitylawyerblog.com/topics/arizona-nonprofit-corporations/>(5)
      - Arizona Nonprofit
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      - Audits and
Examinations<http://charitylawyerblog.com/topics/i-r-s/audits-and-examinations/>(1)
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Rule<http://charitylawyerblog.com/topics/protection-from-liability/business-judgment-rule/>(2)
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Group<http://charitylawyerblog.com/topics/carter-law-group/>(5)
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Schools<http://charitylawyerblog.com/topics/schools/charter-schools/>(1)
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Test<http://charitylawyerblog.com/topics/commensurate-test/>(1)
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Doctrine<http://charitylawyerblog.com/topics/threats-to-exemption/commerciality-doctrine/>(1)
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Procedures<http://charitylawyerblog.com/topics/compensation-setting-procedures/>(4)
      - Conflicts of
Interest<http://charitylawyerblog.com/topics/governance/conflicts-of-interest/>(1)
      - Directors and Officers
Insurance<http://charitylawyerblog.com/topics/protection-from-liability/directors-and-officers-insurance/>(2)
      - Donor Advised
Fund<http://charitylawyerblog.com/topics/donor-advised-fund/>(1)
      - Donor Issues <http://charitylawyerblog.com/topics/donor-issues/> (2)

      - Donor Restrictions<http://charitylawyerblog.com/topics/endowment/donor-restrictions/>(2)
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Development<http://charitylawyerblog.com/topics/economic-development/>(1)
      - Endowment <http://charitylawyerblog.com/topics/endowment/> (2)
      - Ex-Officio
Directors<http://charitylawyerblog.com/topics/governance/ex-officio-directors/>(1)
      - Excess Benefit
Transactions<http://charitylawyerblog.com/topics/excess-benefit-transactions/>(2)
      - Executive
Committees<http://charitylawyerblog.com/topics/governance/executive-committees/>(1)
      - Feeder Organization<http://charitylawyerblog.com/topics/threats-to-exemption/feeder-organization/>(1)

end excerpt:

*Any suggestions, ideas, or?*
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