Split receipting well after the fact

Robert Brown

Has this ever happened to any of you?  A donor wins something at auction that has a tax deductible amount, pays for it themselves, and then 4-8 months later says "Oh, I split this item with # of families who paid me back for their share.  Can you send us all revised receipts showing the amounts we all paid?"  And my boss directs me to revise the receipts and send them out.


I have a problem with doing this because we never see this money.  I'm basically being told to give a tax deductible receipt to people who didn't give us money and I have no way to show that they gave us x amount of dollars for this package.  Plus, we're just going on someone else's word that this happens.  I get wanting to keep donors happy, but at the same time I don't know if this is legal to do.  When I used to raise money for charites and such through clubs I belonged to, I was told never to cut a check for the money that I received, that each donor had to cut their own check or that I had to keep the cash separate. and bundled with each donor's name. 


My bosses override my objections to this every year.  And each year I hate it more and more.  What do you all think?  Is this something to worry about?  Sometimes it's only a couple hundred dollars, but sometimes I'm doing this with thousands of tax-deductible dollars for more than 10 receipts.  Advice is appreciated, thank you all.

JoAnn Strommen

Ugh! I would struggle with this also. Had on a small scale with 'dance for the Y' events when parent would write check for multiple sponsors of their child who gave them cash.


Months later and larger amounts is even more of a problem to me. I know some look at donor intent, I tend to look at what I see as legal in protecting my org as well. Have you talked to your org's auditor/tax consultant/legal advisor? While you want to be able to take people's word for things like this it's tough to follow correct procedures.  Even more when boss does not understand. It's sure hard when we want to maintain positive relationships with donors.


I'd consider a letter thanking additional participants for their part in auction purchase as reported to you by XXX of $X. Please consult your tax advisor regarding possible tax deduction for the auction purchase. I'd also do a letter to the one who gave you the payment and say similarly that their tax deductible amount may require revision as they have now notified you that payment amount was shared with others, consult their tax advisor. 


Tough issue.

 

Dariel Dixon

I don't do this.  I take a hard stand on this.  I think it also depends on if your boss actually knows how to handle these situations, or is unwilling to handle the backlash.  I don't want to act like everyone knows that you can't do this, and the repercussions of said actions.  It sounds like your bosses in this scenario know that this is wrong. I have told many a supervisor that I won't do it, and they can do it themselves if they feel strongly about it.  I'll gladly send a recognition letter without any tax-deductible language, but if they want a tax-deductible letter, they will have to send their payment directly to our organization.


If you don't stand up to this behavior, you'll become an enabler and it will never stop.  You have to stop the cycle.


I'm willing to bet that the original donor will try to claim all of the tax-deductible amount as well.  That's the biggest rub for me; they are playing their friends for a higher donation amount.  


It sounds like you're fed up with it.  It's not worth your integrity to do this, if you feel like this.  I'd definitely try other methods, but what they are asking you to do is commit fraud.  You don't have to do it.