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Non-profit corp received donations from oil company and did not report as income

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    Non-profit corp received donations from oil company and did not report as income

    Ridiculous question. A new client of mine said they receive $3,000 a month in donations from an oil company. They did not deposit it into their business bank account so it is not showing as income. The client is suggesting it should not be reported as they receive funding from the state (will soon be the county) and it would throw a wrench in the mix since they are already receiving funding. I know it needs to be reported. I just want to hear your thoughts. The client provides drug rehab services in a minority neighborhood in Los Angeles.

    #2
    My thoughts are to stay away from this client. Actually, this isn't really a client - it's a huge headache already in the works.
    "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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      #3
      Is this a 501(c)(3) corp?

      How many uncashed checks are they hiding?

      Has the donor inquired why checks are uncashed?

      This is a scandal waiting to be investigated so get yourself a good attorney if you file a false 990!
      Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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        #4
        Originally posted by mdelgado10 View Post
        Ridiculous question. A new client of mine said they receive $3,000 a month in donations from an oil company. They did not deposit it into their business bank account so it is not showing as income. The client is suggesting it should not be reported as they receive funding from the state (will soon be the county) and it would throw a wrench in the mix since they are already receiving funding. I know it needs to be reported. I just want to hear your thoughts. The client provides drug rehab services in a minority neighborhood in Los Angeles.
        The answer may be by you rereading your first sentence.

        Make sure your insurance is up to date and have a daily consultation with your attorney.

        Then consider getting your sneakers on and run further than forest gump did.
        Always cite your source for support to defend your opinion

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          #5
          Tell your client that scheme would give IRS reason to revoke the exemption as a tax exempt entity
          Uncle Sam, CPA, EA. ARA, NTPI Fellow

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            #6
            I have a feeling the client may not be very concerned about what the IRS may do, but very interested in having a tax preparer to try and shift blame to if their already-under-the-bridge activities come under the microscope.
            "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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