I see a lot of non-profit websites that ask for people to make donations to help pay for webhosting costs. I've also seen people who post on message boards asking for people to make donations to their "happiness fund" which is just so they can go out and buy beer. Do the people receiving these donations have to report them on their taxes? I can't seem to find any rules about that.
It's income, and they're probably not tax-free organizations, so I don't see why they wouldn't be required to. Whether they actually *do* report them is a totally different matter. If they only get small amounts, they could probably slide under the IRS's radar and get away with not reporting.
-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA
Yes.
In the case where "donations" are for certain costs, it might be alternatively permissible to reduce those expenses instead of including the full amount of the expense and the donation as separate items - like reimbursement (from the pure accounting point of view). I'm certain that the IRS will think of the structure set up by IRC 183 and demand both entries, complete with the 2% of AGI floor screw factor on the expenses (should the activity actually have a "profit").
The act of solicitation of an amount kind of kills off the character of it being a gift.
But, if the small amounts total large sums and they are deposited in a bank account they will start to get in radar range. Professional criminals do not talk in public about their activities.
-- Frederick E. Jorden
Probably Just personal gifts from you to them. Not deductible by or taxable to the giftee. Do tou report your birthday presents? Sucker!
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