Brickbat: Donating to a Good Cause

When the COVID-19 pandemic first hit last spring, Louis Goffinet, a teacher in Connecticut, started a Facebook fundraiser to buy groceries for families affected by the disease. He raised more than $40,000, which he used to fund 140 family grocery trips, 125 family dinners, 80 Thanksgiving pies, 31 Thanksgiving dinners, and rental assistance for five families, as well as helping 20 people buy Christmas gifts for their children. And this February, the IRS sent Goffinet a 1099-K form, telling him the money he raised was taxable income. He owes $16,000, but with the help of an accountant he hopes to fight that bill.

Comments

[Inigo Montoya]

I remember seeing a bumper sticker as a kid that said “Don’t steal. The government hates competition.”

It also hates people competing with it to provide charity, especially because it exposes just wasteful they are at such things. To accomplish as much as this one guy did, the government would have laid out not 10x but at least 100x as much cash.

Showing them up that badly might start giving folks ideas:.ideasike taking away responsibilities from them when it’s clear they handle them badly.

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[Bob1062]

This is disincentivising charity. Jump through hoops in order to give freely. What are the chances this guy gives time, energy and effort for those in need again? How many lives did he touch? It'll be zero next year.

[Quo Usque Tandem]

"It’ll be zero next year."

Lesson learned.

[American Mongrel]

Relevant: https://www.aier.org/article/the-secret-history-of-the-monopolization-of-welfare-by-the-state/

[Adans smith]

The bastards haven't had time to send my refund after 2 and a half months but they can go after a guy helping people out quick. I got last years refund the end of January this year. Good thing I don't need the money.

[Quo Usque Tandem]

I can't even get them to answer the phone.

[Fist of Etiquette]

You know what's even more patriotic than helping your neighbors during a national crisis? PAYING YOUR TAXES.

Best leave charity to the experts: the United States Congress.

[Jerryskids]

Keep in mind the whole concept of withholding is based on the idea that the government comes first. Before you take care of yourself and your family, before you put a roof over their head or food on their table or clothes on their back, the government gets their's first. The most important part of your job is making sure the government gets their's first.

[Real Books]

He didn't build that!

[Kristian H.]

Devil's Advocate: At the same time, we have BLM founders and grifters buying multiple homes in swanky melanin challenged communities and fancy new cars.

The rules about 501c-3 charitable (which really only need a lot of docs if you take in more than $5k in income and aren't a church. Yeah, yeah, guy should be able to bring all kinds of money (~$40k i un this case) in a personal pay pal account, because 'Imuha libertarian!' or 'I help peeplz!'.

But, by Heaven, you'll get a lot more support for libertarians if you act like laws to matter AND follow the laws (I mean, beside gun control laws and smoking bans and covid shutdowns and big biz being allowed to freeze out conservatives) until they are changed and not making excuses for a guy for the 'Feelz'. Might as well be a liberal democrat or an anarchist totalitarian (BIRM) at that point.

[Illocust]

The guy's a teacher. This is probably a case of being ignorant of the law more than deliberately flouting it. It's obvious to me you would be required to pay taxes on the money taken in because my family has a healthy skepticism of government and shares information like this with the younger generation, but this guy may have never had someone point out that this is how our system works to him. And once the money is spent, it's not like he can take back some of the food to help pay the tax bill.

[Kristian H.]

Consider:
"The guy’s a teacher."
"[T]his guy may have never had someone point out that this is how our system works to him."

Am I the only one who thinks there is a problem with that?

I think every government employee should be held to a HIGHER standard of behavior or knowledge than the 'common' citizen. That includes tax compliance (tax non-compliance by a government employee being a double theft in my mind).

[Quo Usque Tandem]

Methinks you are a part of anatomy that rhymes with runt.

IOW, fuck off, slaver.

[Kristian H.]

Ah, what? That I expect people who depend on money taken from citizens by force to, you know, behave with integrity I am slaver?

Not at all sure what the hostility is for. But, reason, you know, where people think and use logic rather than emotion.

[American Mongrel]

Lol, welcome to reason comment section. In addition to slaver, at some point you can be expected to be called a trump cultist as well as a lefty shit. Enjoy your time here.

[Ron]

Teachers don't know anymore than what they teach. think about it we give teachers all sorts of credit but most learn nothing beyond what they teach so a kindergarten teacher really doesn't know much more than a kindergartner. this is so true and same with nurses, so they know how to put on a band aid they sure as heck know very little about viral pathagens yet the media gives them all sorts of credit during the Plandemic as if they were all expert virologist

[Ben of Houston]

Oh, good grief. A teacher knows a lot about childcare, psychology, and such things.

However, I don't expect a teacher to know all the intricacies of tax law. Yeah, he should have known that he should have done some paperwork. However, there is a reason that the courts are supposed to show reasonable deference to pro-se litigants who show good faith to perform things correctly.

The IRS should give the guy the forms to fill out for a 503B or whatever, and then just let it go.

[Rossami]

If BLM grifters are buying mansions instead of doing what they said they would with the donations, they are probably prosecutable under fraud and a couple other charges. There's no reason for the IRS to get involved in "protecting" donors.

[Ron]

the IRS won't touch BLM they are protected group. Now the NRA or that a different story

[m4019597]

BLM aren’t grifters. They’re extortionists.

“Pay up or we burn you down” is not a con, it’s a threat.

[mad.casual]

You realize you've got the justification backwards, right? You use the good to justify the bad, not the other way around. "If we let this guy off the hook, then we let everyone off the hook." not "If BLM can fill out forms, we ought to be able to force this guy to as well."

[Longtobefree]

So he may wind up in jail, and Lois Lerner is free.
Time to end all deductions, and lower the rate to 5 or 10 percent.
Cut half the IRS staff.

[Jerry B.]

Nope. You don’t get jailed for non-payment of taxes: just, possibly, for failure to file or falsifying your return.

[Rossami]

Of course, if you didn't pay your taxes because you didn't think that any of this stuff was taxable, then by definition you have "falsified your return". So, yeah, this guy is at risk of jail. He shouldn't be but the IRS has prosecuted worse cases.

[Marshal]

if you didn’t pay your taxes because you didn’t think that any of this stuff was taxable, then by definition you have “falsified your return”.

Omitting an item is not falsifying a return, that is an error.

So, yeah, this guy is at risk of jail.

No he isn't. All he has to do is file an amended return.

There are only two groups who risk jail:

1. People who refuse to file or respond to notices for many years even after court warnings.

2. People who create entirely fake exclusions and deductions showing they intentionally committed tax fraud.

[Vernon Depner]

3. People who get caught hiding income.

[John F. Carr]

A criminal conviction for tax evasion requires proof that you knew you were breaking the law.

[GroundTruth]

Cute.

mens rea has been dead and buried many, many years.

[John F. Carr]

The form in question was not sent by the IRS and does not designate the income as taxable. The payment processing company notified the IRS that this guy got $41,000. Now he has two options. 1: Tell the IRS that the money was untaxed gifts. 2: Tell the IRS it was taxable business income and shout to the world how evil the IRS is. He chose... poorly.

[Aladdin's Carpet]

I do wonder if the IRS stands to make money from all of this pandemic nonsense because of the shift to digital payments.

It is so much easier to track and tax digital payments than cash, and I know some people who switched from running pure cash businesses side hustles to moving that to venmo or other online systems.

[Aladdin's Carpet]

In all likelihood, this was a misunderstanding the IRS did not realize it was a charity, and once they do they will send the appropriate charity forms and drop this.

If not, screw them. But registration is important to make sure he isn't pocketing the money he has raised for the families ... again this seems like some faceless official didn't realize what exactly this was and the forms were filed incorrectly so they assumed it was income.

If he registers this all under a non-profit, it ought to be fine.

[John F. Carr]

This falls under gift rather than charity. I can give you $10,000 tax free whether you use it to feed the homeless or buy breast implants. If you register as a charity my gift becomes tax-deductible to me. If you give me something in return the income becomes taxable to you. Otherwise it's my post-tax income becoming your post-tax income.

[Marshal]

1. The IRS doesn't send 1099-Ks any more than the IRS sends W2s. The entity paying the money files the forms.

Dawn Brolin is a Certified Public Accountant and owns Powerful Accounting. She explained that third party transaction sites, like the one Goffinet used for his fundraiser, are required to issue a 1099-K form if the transactions exceed $20,000.

2. He owes $16,000,

He doesn't owe 16k, that's what he would owe if he didn't spend any of the funds on approved expenses which is what he reported to the IRS by not reporting the income at all.

It's interesting that Reason both ridicules others for their ignorant fearmongering and engages in ignorant fearmongering.

[John F. Carr]

"Brickbats" takes clips from the mainstream media's reporting. The original story got it wrong. Obviously wrong if you know your tax law and tax forms, but not obviously wrong if all you know or need to know is your annual W-2.

[Marshal]

The original story got it wrong.

So what? Repeating nonsense because it fits the outrage of your readers is exactly what Reason criticizes in other media.

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