Solicitation Disclosure

September 2, 2011

Authored by: Nathan Boyce

There are consequences to improperly representing that a donation is deductible. Generally, Section 6113 requires non-501(c)(3)s that are seeking donations to conspicuously disclose “that contributions or gifts to such organization are not deductible as charitable contributions for Federal income tax purposes.'” A $1,000 fine is imposed up to $10,000 for the year for failure to include such language. For intentional failure, the daily fine is the greater of $1,000 or 50 percent of the aggregate cost of the offending solicitations–with no maximum for the year. To be clear, this is not advice for pending 501(c)(3)s–that’s another blog topic–but for others. For example, if my (c)(7) social club asked for donations for my kids’ psychological rehabilitation, it would have to disclose non-deductibility.

And that leads to a recent conversation in my home the other night between my wife, my nine-year old son and I. Out of the blue, my wife said “do you want to share a temptation with me?”

“What?” I replied.

“Do you want to share a temptation with me.”

“What?” I asked again. You mean, we both go to a bar and watch people smoke?”

“No.” She said. “A Temptations? The pudding dessert.”

“Oh. Ok.”

My son quickly chimed in: “Hey, I want a temptation!”

As his sister entered the room, I whispered to him: “Punch your sister, punch your sister.” Without missing a beat, my son jumped up and punched his sister.

I draw 2 lessons from this story and the IRS rules: 1. Failure to use the right words can lead to trouble. 2. If you want your child to follow the cartoon angel sitting on his shoulder, don’t give voice to the cartoon devil sitting on his other shoulder.