501(c)(3) donation letters

[Stephen1]

Federal income taxes - We make monetary donations during the year to a couple 501(c)(3) organizations. The donations are processed electronically through a service. That service charges a fee which it deducts from the amount that it transmits to the 501(c)(3) organizations. My question has to do with the amount that the organizations list on the annual letters they send out. Should it be the net or the gross of what we donated? Has the IRS addressed this question?
We report on our tax form uses whatever the organizations list on their letters. One organization reports the net and the other reports the gross - and my bookkeeper (wife) grumbles.

 

[adjusterjack]

Seems to be a common question. The consensus from several sources is that the total amount including the processing fee is deductible.

Donation Processing Fees : Charity Navigator

Are credit card fees tax deductible to the donor? | Nonprofit Issues

Solved: Is my charitable deduction *fully* tax deductible if the organization accepts credit card donations? (intuit.com)

Note that this information is not from the IRS.

The IRS does not address processing fees in Publication 526 but does address car and travel expenses to a certain degree on Page 6.

https://www.irs.gov/pub/irs-pdf/p526.pdf

Your grumbling bookkeeper would be wise to consult a tax pro.

 

[Zigner]

Seems to be a common question. The consensus from several sources is that the total amount including the processing fee is deductible.

Donation Processing Fees : Charity Navigator

Are credit card fees tax deductible to the donor? | Nonprofit Issues

Solved: Is my charitable deduction *fully* tax deductible if the organization accepts credit card donations? (intuit.com)

Note that this information is not from the IRS.

The IRS does not address processing fees in Publication 526 but does address car and travel expenses to a certain degree on Page 6.

https://www.irs.gov/pub/irs-pdf/p526.pdf

Your grumbling bookkeeper would be wise to consult a tax pro.

If the OP is talking about a separate for-profit business that collects the donations and then forwards them to the appropriate charities, then I don't think the fees would be deductible. "Charity Navigator" is itself a 501(c)(3) non-profit organization, so it makes sense that donations to them would be deductible.

 

[davew9128]

The direct cost associated with a charitable endeavor is itself a charitable donation. That would include any fee associated with making a donation. This is why tax people ask bookkeepers to stay away from tax forms.

 

[adjusterjack]

If the processing service is arranged by the 501(c)(3) organization for all donors (and I'm guessing that it is) then the fee is an expense of the organization.

I would think that the gross donation is deductible for the donor. That's what I think Stephen1 is asking.

 

[Taxing Matters]

If the processing service is arranged by the 501(c)(3) organization for all donors (and I'm guessing that it is) then the fee is an expense of the organization.

And would be part of the charitable deduction for the donor in that case.

 

[Stephen1]

Thank you all.