ISSUE

Our prayers go out to victims of Hurricane Florence.  As we pray for them and consider funding relief efforts, the IRS warns of possible charitable scams.

 

SITUATION

Saltwater Christian College (SCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are required to file Form 990 annually.

SCC calls us to say that they are praying for the victims of Hurricane Florence.  Their students are organizing a fundraising effort aimed at aiding those affected.  SCC’s Accounting Team asks us about any pitfalls they might encounter in connecting with a charity to partner with financially in assisting the hurricane victims.

We answer that, unfortunately, they need to be careful not to be lured by “criminals and scammers.”  The IRS has issued IR News Release 2018-188 to remind taxpayers to beware of fraudulent schemes in times of natural disasters.

 

RULES

From IR News Release 2018-188:

In the wake of Hurricane Florence, the Internal Revenue Service is reminding taxpayers that criminals and scammers try to take advantage of the generosity of taxpayers who want to help victims of major disasters.

Fraudulent schemes normally start with unsolicited contact by telephone, social media, e-mail or in-person using a variety of tactics.

• Some impersonate charities to get money or private information from well-intentioned taxpayers.
• Bogus websites use names similar to legitimate charities to trick people to send money or provide personal financial information.
• They even claim to be working for or on behalf of the IRS to help victims file casualty loss claims and get tax refunds.
• Others operate bogus charities and solicit money or financial information by telephone or email.

Help for disaster victims

Comprehensive information on disaster-related tax issues, including provisions for tax relief, can be found on the disaster relief page on IRS.gov. In the case of a federally declared disaster, affected taxpayers may also call the IRS Special Services Help Line, 866-562-5227, with disaster-related tax questions. Details on available relief can be found on the disaster relief page on IRS.gov.

Donate to real charities

To help taxpayers donate to legitimate charities, the IRS website, IRS.gov, has a search feature, Tax

Exempt Organization Search, that helps users find or verify qualified charities. Donations to these charities may be tax-deductible.

• Contribute by check or credit card. Never give or send cash.
• Don’t give out personal financial information – such as Social Security numbers or credit card and bank account numbers and passwords – to anyone who solicits a contribution.

Taxpayers suspecting fraud by email should visit IRS.gov and search for the keywords “Report Phishing.” More information about tax scams and schemes may be found at IRS.gov using the keywords “scams and schemes.”

 

BOTTOM LINE

• Please continue to pray for victims of Hurricane Florence and other recent natural disasters.
• The IRS has issued a news release warning of the common attributes of fraudulent relief schemes. (IR 2018-188)
• Contribute by check or credit card – not cash – and never give out personal financial information to contribution solicitors.
• There are many excellent faith-based relief organizations that would use donated funds and goods with great integrity and effectiveness – please also pray for their efforts.

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

© 2018 Christian College Resources, Inc.