We Have New Expert Tax Advisors Out There Now.................

[WhiteOleander]

Client came in yesterday. He had two letters from two separate 501c 3 orgs. One was a Cemetery. This guy mowed the grounds at a discounted rate. The letter stated that they normally paid $XXXX.XX for the service. But since they only paid Mr. Mower $XXX.XX, he could deduct the difference as a donation on his tax return.

The other letter was from Head Start. It stated the "your volunteer hours have value" Since you volunteered this year, the value of your hours is $XXX.XX. This amount can be deducted on your tax return as a donation.

Wow, I learn something new everyday.

[Jiggers]

I would send a copy to the IRS.

[DaveO]

I had a retired fellow that did lots of repair and painting for his church. He would bring these letters in every year insisting he could deduct his time. Each year I would explain why he couldn't. Finally he didn't come back having found a more enlightened preparer I assume.

[Super Mom]

Really? This is a new one on me, I thought your time had no value for contribution deductions. Has something changed?

[David1980]

Along the same lines I've seen charitable deductions deducted for self-created art. Say $500 in supplies but they get it appraised at $8,000 and take a deduction for $8,000. Whenever I see something like that on a prior year return I just know the taxpayer isn't going to like me.

[Koss]

Head Start

Head Start programs are nonprofit, and they get a substantial amount of funding from taxpayer dollars. It is a small scandal for such a program to be giving out that kind of bad advice.

I would write to the director, and send a copy of the IRS publication that discusses charitable donations, directing their attention to the part that says you cannot take a deduction for the value of your time. I would also request a written response to my letter.

And if I didn't get a written response, I might even go further.

I might send a redacted copy of the letter to the media, or post a redacted copy on the web...

By redacted, I mean removing the identifying information of the individual taxpayer. I would not remove the name of the Head Start organization.

Nonprofit organizations that are funded with public money need to be held accountable for this sort of nonsense.

It's a bit more understandable when it's a small church. Still shouldn't happen; they shouldn't be giving tax advice. But the people running a Head Start program really ought to know better.

BMK

[Koss]

Send a copy?

I would send a copy to the IRS.

I would be surprised if they actually did anything with it. The IRS can't even answer tax questions over the phone anymore. They are woefully understaffed and underqualified.

BMK

[Burke]

Really? This is a new one on me, I thought your time had no value for contribution deductions. Has something changed?

White Oleander was being sarcastic.

[Burke]

I would be surprised if they actually did anything with it. The IRS can't even answer tax questions over the phone anymore. They are woefully understaffed and underqualified.BMK

And they have stopped doing tax returns this year. Referring everyone to VITA or AARP free services.

[Koss]

Value of Volunteer Hours

Apparently, there are some guidelines that are used for internal, non-tax accounting purposes, within the Head Start programs, that allow volunteer hours to have a monetary value. It has something to do with budgeting.

Of course, this does not mean that the individual volunteer can take a tax deduction for their time. It explains the misunderstanding; it does not excuse the inaccurate letter.

I found this in a Google search:

http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/operations/fiscal/financial-mgmt/budgets/Non-Federal%20Share.htm

BMK

[taxea]

I agree with Koss and Jiggers...send copies to IRS.