I am going through an audit for 2003 during which I was a volunteer chapter board member for a trade association for my industry. The association is properly registered as non-profit and tax exempt. It is not a charity. The auditor is disallowing any expenses connected to my duties as a board member saying they are only indirectly connected to my business. Expanding on that, expenses associated with attending educational meetings and seminars as part of the audience are deductible because the education directly benefits my business. But expenses connected with planning those meetings or running the organization are for the direct benefit of the organization, not my business and therefor not deductible. This is true, she says, even though the association benefits my business through educational and lobbying and promotional activities. Can this be true? Have I and every board member I know had it so wrong for so many years? If so, it would be a big disincentive for anybody volunteering for their trade organization. Similarly, she tells me that donations to the organization are not deductible even though dues, fees and meeting admissions are. So, if I attend an educational meeting the admission cost is deductible. But if I donate refreshments for the meeting that is not deductible. If I make a free will cash donation to help the association it would not be deductible. Can that be right?
thanks in advance for any help!
Scott