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Question for Neil - ATA 501C-3 Status

Discussion in 'Uncategorized Threads' started by Pocatello, Aug 30, 2007.

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  1. Pocatello

    Pocatello Active Member

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    I'm thinking seriously about renewing at the Life level this year instead of annually, but part of this decision is whether I can claim the $500 as a charitable donation. I know that the ATA was approved for 501 C-3 status a while back, but has it been tested whether dues payments qualify as charitable donation? When I make donations to other 501 C-3 entities, I receive a letter back thanking me for my donation, and attesting that I received no goods or services in return. Does the ATA furnish such a letter?

    As an aside, congratulations on your attaining the Presidency, and thanks so much for all of your hard work for the rest of us.

    Regards.

    Larry
     
  2. lumper

    lumper TS Member

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    I aint not lawyer or tax expert at all or else the IRS would not be after me for my past transgressions but your dues are not considered a donation since you are receiving a membership, which would be considered both goods and/or services.

    In short ... I dont think you can claim it as a charitable contribution but I may be wrong. I'll sleep at a Holiday Inn Select tonight and let you know if that could be the right answer in the morning.
     
  3. FarmerD

    FarmerD TS Member

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    lumper, you sir are an Ass. Richard
     
  4. lumper

    lumper TS Member

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    Richard ... thank you, from somebody like you I take that as a compliment.
     
  5. g7777777

    g7777777 TS Supporters TS Supporters

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    Dont know ---but if you are receiving a benefit from this-- that isnt normally considered a donation

    Lumper may be correct

    regards from Iowa

    Gene
     
  6. lumper

    lumper TS Member

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    Gene ... I would bet your fantastic never shot before XT with the fancy wood on it that I might be correct but let us not forget that BlkLab Richard thinks I'm an ass. ;-)
     
  7. dmarbell

    dmarbell Active Member

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    I don't have time to do more research right now, but this type of organization appears to be covered under Code Sections 501(j) and 501(c)(3). As such, contributions are tax deductible. See Publication 526. Certain membership benefits are excluded from being a benefit that would exclude deductibility.

    Danny
     
  8. lumper

    lumper TS Member

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    Thats actually great news and what makes it the greatest news of all is that I was wrong ... but I hope I'm still an ass in the eyes of Richard the BlkLab. ;-)
     
  9. schockstrap

    schockstrap Active Member

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    I emailed the ATA office last year to ask the same question. They indicated that the life membership was a tax-deductable contribution, and that they would send a letter acknowledging the contribution for your tax file. I immediately sent in my $500 for a life membership, and eventually did receive the letter for my tax records. I wanted to show my appreciation for all the hard work that was done to place the organization in a 501c3 status, start the funds for promoting the sport of trap, and provide me with another tax deduction.

    --Dan
     
  10. Finprof

    Finprof TS Member

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    If you can get a deduction for membership in a 501c(3) organization, then you should be able to deduct all the tuition for sending your kids to college or all the hospital bills from a church-affiliated hospital. A pure donation to ATA would be deductible, but not dues. You could probably argue that the services provided for your $18 annual dues or $500 lifetime dues are valued less than the payment made, which would make the difference deductible. This would be consistent with fund-raising dinners where the $500 cost of the dinner is much greater than the value of the dinner. If ATA is saying that the total dues payment is deductible, they haven't consulted a CPA or tax lawyer.
     
  11. 870

    870 Well-Known Member

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    Finprof:

    I would assume they have consulted with CPA's or tax attorneys on this. It is not unusual for dues to a charity to be deductible. As you indicated, it hinges on what value is received for the payment. We don't get any freebies as a result of membership, our dues are paid to sustain the organization. Since they are telling you it is deductible, as they are required by law to do, I would not keeping digging further to find a problem.

    Certainly not same as tuition or hospital bills where value is received for the payment.
     
  12. Finprof

    Finprof TS Member

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    Here is a quote from the Trout Unlimited website. TU is also a 501c(3) and has had that status for a long, long time. They view themselves as a "conservation" organization rather than an organization primarily for the benefit of its members.

    "Trout Unlimited is incorporated as a 501(c)(3) non-profit educational, charitable organization, and all monetary or property donations are tax deductible to the extent allowed by law."

    They say that donations are deductible. They don't say that dues are deductible. My guess is that the Sierra Club and other conservation groups would make a similar statement.
     
  13. dmarbell

    dmarbell Active Member

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    Here is part of Pub 526.

    Membership fees or dues. Membership fees or dues

    You may be able to deduct membership fees or dues you pay to a qualified organization. However, you can deduct only the amount that is more than the value of the benefits you receive. You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. They are not qualified organizations.

    Certain membership benefits can be disregarded.

    Both you and the organization can disregard certain membership benefits you get in return for an annual payment of $75 or less to the qualified organization. You can pay more than $75 to the organization if the organization does not require a larger payment for you to get the benefits. The benefits covered under this rule are: Any rights or privileges, other than those discussed under Athletic events, earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services, and Admission, while you are a member, to events that are open only to members of the organization if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than a specified amount, which may be adjusted annually for inflation. (This is the amount for low-cost articles given in the annual revenue procedure with inflation adjusted amounts for the current year. You can get this figure from the IRS.)
     
  14. 870

    870 Well-Known Member

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    As I said, why go looking for a problem. The charity is providing you with documentation that the payment is deductible. You aren't going to get penalized even if it's thrown out. Let ATA worry about the details.

    We don't receive anything except for the annual average card in return for our dues. We pay fees for everything else.

    Sierra Club etc. may be deductible, but it depends on what freebies you get in relation to the amount of the dues. Is there a free magazine, discounts on items etc?
     
  15. phirel

    phirel TS Member

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    It would not be a legal problem deducting ATA membership dues. But, the deduction may not stand up against an IRS audit. Quite possibly some auditors would not accept the deduction while others might consider it appropriate. Consistency in enforcement and interpretation of our tax laws is lacking. Also, a single small questionable deduction can trigger a full audit. I suspect that not all people who might review a tax form enjoy shooting guns and a deduction for membership in a shooting organization might just catch their interests.

    Pat Ireland
     
  16. dmarbell

    dmarbell Active Member

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    Here is the result of a search on the www.irs.gov web site under Publication 78, which lists eligible charities:

    Amateur Trapshooting Association (Until September 200) Vandalia OH USA --

    A public charity with a 50% deductibility limitation.

    The "September 200" is obviously some sort of typo or limitation on character length on entering information in the database.

    The "--" is a code that when clicked on gave the result of "A public charity..." above.

    Based on this listing, no one should have any qualms about deducting dues paid for membership in the ATA. In my opinion, dues would be allowed as a deduction at the audit, supervisor and appeals levels of the IRS. It would require revocation of the ATA tax-exempt status to disallow the deduction.

    If other tax professionals have a different take, let's hear it.

    Danny
    CPA, CFP
     
  17. lumper

    lumper TS Member

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    Pat ... what you describe goes hand in hand with the ATA rule book, it is all up to interpretation.
     
  18. phirel

    phirel TS Member

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    lumper- There may be a few parts of the ATA rules that are open to a limited interpretation, but comparing the tax code to our rules is inappropriate.

    Danny- Would you please expand on the phrase " 50% deductibility limitation." I think I know what it means, but in the past I thought I knew what my CPA meant with certain words only to discover later that CPA's have a special language.

    Now, for a real CPA question. I purchased an ATA life Membership about 30 years ago for $75. I could use actuary tables to estimate the remaining useful years of my life membership and then estimate the increased value of the membership per year based on the rate of the increase of the cost of the life membership. A quick estimate done only in my limited brain, comes up with a deduction of around $2 per year. This would allow me to buy an additional diet Coke each year.

    Pat Ireland
     
  19. 870

    870 Well-Known Member

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    Danny:

    I obviously agree with your result, but admit it is not as clear cut as you make it sound in your last post. The people w/ reservations are not doubting the charitable status of the ATA, just whether the dues are considered a contribution.

    That is not up to us to determine, the charity has told us the dues are deductible. That is all the substantiation I need. If IRS has a problem with this, it will involve the IRS and the ATA hashing it out.

    Pat:

    The 50% limitation is what applies to most charities. Any deduction you take is limited to 50% of your adjusted gross income. In other words, you can't take a deduction that wipes out more than 1/2 of your AGI.
     
  20. dmarbell

    dmarbell Active Member

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    The deductibility of dues is covered under my post above with regards to Publication 526 and member dues.

    Danny
     
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