Giving Guidelines: Be Careful Where You Lend a Hand

As the people affected by Hurricane Katrina begin to spread out across the nation, organizations offering help are springing into action. Unfortunately, some of the organizations springing up are actually scams. While this should not prevent anyone from opening their hearts and wallets to help others, caution is not misplaced, especially when dealing with new or unrecognized organizations.

Both the Internal Revenue Service (IRS) and the Federal Trade Commission (FTC) are warning consumers to be careful when making financial contributions. Both recommend dealing with well-known organizations such as the International Red Crescent/Red Cross. If the donor is unfamiliar with the organization, particularly if the organization is soliciting them for funds, the IRS offers an online Search feature to help them determine the legitimacy of the soliciting organization. The FTC goes even farther, warning against contributing to organizations that just sound familiar because their name is similar to nationally known organizations. The best advice: when in doubt, check them out.

Other Do’s and Don’ts for giving include:

  • Do give directly to a charity not to anyone who says they are soliciting for them.
  • Do ask for identification from anyone approaching you in person asking for donations.
  • Don’t give out personal information, especially Social Security Numbers, that could be used to steal your ID.
  • Don’t give cash.

The IRS also reminds donors that some contributions are tax deductible and not all the potential deductions may be familiar. For instance, qualifying expenses for a student, including American students, living in your home under a written agreement are deductible. Out-of-pocket expenses incurred in giving services to a qualified organization are also deductible. In addition, volunteers can deduct travel expenses including parking fees and tolls, lodging costs and the costs of meals when you are away from home. More details on charitable contributions and deductions are available in IRS Publication 526.

“We encourage citizens to make sure their contributions are put to the best use possible to help Hurricane Katrina victims,” said IRS Commissioner Mark W. Everson. “The IRS will do everything possible to assist both taxpayers and charities in this difficult time.”

You may like these other stories...

IRS must take oath on Lerner emails: judgeMackenzie Weinger of Politico reported on Thursday that a federal judge ordered the IRS to explain under oath how it lost emails connected to Lois Lerner, the ex-IRS official at the...
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.