IRS Rejects 501c3 Status!

[FSPinNY]

Seamas,

I agree, I use every legal tax break I can get.  In 2004, considering all of the taxes that I am forced to pay here in NY, I turned over 49.7% of my income.  Makes me sick to even have to write that   NH in 2006 or bust. 

Tax deductaible orgs definitely have a huge advantage when attracting dollars, but in the case of the LSF, I think it's a good choice for now.  And, maybe it will become a pioneer in this area.

Brian

[Russell Kanning]

The lsf has low expense ratios.

[tracysaboe]

I know that the decision has been made and it is in no way my intention to try and reopen this divisive issue.  I've withheld comment both because I saw how things were going and because I went over all this with respect to the FSP (not) getting 501c3 status.  Still, I'd like to respond to the sentiment expressed below in the hopes of explaining a few things.

I think a few people need to step out of their own shoes and think in terms of someone who is a potential large donor.  I'm fortunate and able enough to make a pretty high income.  This is a relatively new thing for me and something that will most likely come to an end when I move to NH.  Along with this income comes the fact that I have about 1/3rd of my marginal income taken from me via Federal income taxes.  I actually pay more in Federal tax than I _made_ any year of my life more than 5 years ago (and I'm no spring chicken).  Please contemplate that as if it were your situation and how you would feel about it.  Back to 501c3 - if a charity does not have 501c3 status I am giving $150 for every $100 that the charity gets and the other $50 goes to a government that I would rather starve than feed.  There are a number of freedom oriented charities that have managed to deal with getting 501c3 status including ones focused on 2nd amendment rights and eminent domain abuse. I'm very interested in these issues and will mostly donate to these charities.  To characterize my making a smart decision that furthers both my freedom and that of others as not being serious about freedom is nonsense.

To further explain this; back when the FSP was debating this issue I set up a charitable fund.  This allows me to donate money (and get the tax deduction) now, while I'm making it, and designate recipients later (as well as investing it so that it grows).  It?s a great option for someone who has a few windfall years and wants to use them to bank their lifetime charity.  Nevertheless, such a fund can only give money to 501c3 charities and that money simply cannot go to one without this status. 

Finally, as one might suspect, I have no respect for the ?you?re dealing with The Man and therefore not serious? argument.  What I have a lot more respect for is the LSF not wanting to deal with potentially invasive reporting requirements.  For what it is worth, the IRS can usually be backed down with a hardcore attitude and willingness to fight (their letter was preposterous) but the LSF has limited resources and there would be (potentially large) up front costs.  Toss into this mix how this issue is so divisive for the membership and I completely understand the lack of interest in such a fight. 

Finally, I think abandoning such a worthwhile charity as the LSP over this issue would be silly and self-defeating but I?ll just be another guy throwing the odd $10 into the jar and not giving the amount that I?d like to donate.

My feeling is that if people put tax deductions ahead of freedom, then they are not serious about freedom.

Thank you

[Michael Fisher]

Be warned:? look at who's on the Board of the national charity before you donate.? ?

Henry Kissinger?   

Laura Bush?! 

[Pat McCotter]

A name collecting organization.

[Kat Kanning]

From the Voluntaryist webpage (http://www.voluntaryist.com/):

WE ARE NOT TAX EXEMPT
Your gifts to our work are not tax-deductible. Our efforts are bound by conscience and goodwill, not government regulation or political privilege. We refuse to be numbered or supervised by any government agency.

Maybe we should add a similar statement.

[Michael Fisher]

 

[KBCraig]

From the Voluntaryist webpage (http://www.voluntaryist.com/):

WE ARE NOT TAX EXEMPT
Your gifts to our work are not tax-deductible. Our efforts are bound by conscience and goodwill, not government regulation or political privilege. We refuse to be numbered or supervised by any government agency.

Maybe we should add a similar statement.

The late, great, Dr. Gene Scott, famous goofball/kook/genius (depending on your view), never allowed his church to have tax-free status. He railed against other evangelists dabbling in the polite fiction of "love offerings" in exchange for books and tapes. He said that if you wanted it, you could buy it, and pay sales tax, and the church sales arm would pay any income tax that resulted.

The reason was simple: he refused to allow his message to ever be tainted by conforming to government standards about what could or couldn't be said from the pulpit without endangering tax status.

Of course, I don't think the IRS is worried about pyramids, fine art, Playboy bunnies, and Merle Haggard singing for Sunday service. 

[Lloyd Danforth]

That guy is dead?  He's looked a little rough on TV lately! Must be video!

[KBCraig]

Yeah, he died last year. There's never been any mention of it on his web sites, that I could see.

I don't spend much time listening to SW these days, so I haven't paid any attention to his program. We've never gotten via TV.

[Michael Fisher]

From the Voluntaryist webpage (http://www.voluntaryist.com/):

WE ARE NOT TAX EXEMPT
Your gifts to our work are not tax-deductible. Our efforts are bound by conscience and goodwill, not government regulation or political privilege. We refuse to be numbered or supervised by any government agency.

Maybe we should add a similar statement.

Absolutely!!!

I think we should redesign the LSF website to be actually usable by anyone.

We should turn it into a Wiki! 

[Seamas]

Not to be overly pedantic, but I did explain how the fund that I've set up can only give money to 501c3 charities. Here is a site that explains it in detail: http://www.vanguardcharitable.org/policies_broc.asp under Policies and Procedures.  I am my own tax advisor and have a pretty good understanding of such issues.

The idea of starting my own 501c3 charity and dealing with the IRS on my own terms has already occurred to me.  Unfortunately, I suspect that sending money to one's own 501c3 raises a big red flag and one that is a legitimate concern.

I have sympathy for your "opting out of the system" idea in terms of not paying taxes but I?d prefer to fight and beat the IRS rather than hide from them.  Chacun ? son go?t.

Nevertheless, such a fund can only give money to 501c3 charities and that money simply cannot go to one without this status.

Finally, as one might suspect, I have no respect for the ?you?re dealing with The Man and therefore not serious? argument.

You might be surprised that the IRS does not force you to make "charitable contributions" to only 501c3. Ask your tax advisor. If he says no, then ask a different tax advisor.
You could also start a 501c3 charity or just give to one of those.

Maybe you should step out of your own shoes and just stop paying taxes. Are you ready for looking at life a different way? It is very freeing to no longer play their games and start crippling the beast.

[cathleeninnh]

I have sympathy for your "opting out of the system" idea in terms of not paying taxes but I?d prefer to fight and beat the IRS rather than hide from them.? Chacun ? son go?t.

That's a hoot. Believing you can beat the IRS by using the IRS code. The best you can do is better than the poor guy who doesn't try. As long as the government needs more money, the code will continually be adjusted to prevent you from winning.

Cathleen

[Russell Kanning]

If you play by their rules, you will still have to pay something.
I would think that you could donate to your  "own 501c3" ..... think Ford Foundation.

[Michael Fisher]

I have sympathy for your "opting out of the system" idea in terms of not paying taxes but I?d prefer to fight and beat the IRS rather than hide from them.? Chacun ? son go?t.

That's a hoot. Believing you can beat the IRS by using the IRS code. The best you can do is better than the poor guy who doesn't try. As long as the government needs more money, the code will continually be adjusted to prevent you from winning.

Cathleen

That's the reality of the situation.  You can win against the IRS through a legal technicality.  It is theoretically possible, and has happened once recently.  But in reality, you're not going to win.

The way out is not through.