Financial and Tax Related Information About Cairn Rescue USA
Cairn Rescue USA is a 501c3 organization formed under the laws of the State of New York. As such, it files annual reports on Form 990EZ or 990 with the IRS and on Form CHAR 500 with the New York Attorney General’s Charities Bureau. As a 501c3 organization, CRUSA is required to provide to the public upon request copies of its three most recent Forms 990 and CHAR 500 filed, or it may elect to publish those reports on its website in PDF format so that the public can download them. We have chosen to make the reports available on our website. Below are the links to our Form 1023 (Application for 501c3 status), Forms 990 and Forms 500. Additional information about CRUSA as a charitable organization may also be obtained from Guidestar.org. Please note that some of these files are large and may take a couple of minutes to download even with a high speed connection.
We also frequently receive questions from our donors and supporters on the deductibility of donations made to us and expenses incurred by our volunteers in connection with rendering services to CRUSA, and the kind of proof donors and volunteers should retain to substantiate their donations. The paper below answers most of those questions and contains some forms that you may find useful to substantiate your contributions to CRUSA.
Frequently Requested Information About the Deductibility of Donations Made to CRUSA,
Unreimbursed Expenses Incurred in Performing Services for CRUSA and
Appropriate Records To Keep To Substantiate the Same
Cairn Rescue USA (CRUSA) is a tax-exempt, 501c3 organization, and therefore donations to CRUSA as well as unreimbursed expenses incurred by our volunteers in rendering services to CRUSA are generally tax-deductible to the extent that the donor or volunteer itemizes deductions on his/her income tax return.
Persons taking such charitable deductions are required by IRS regulations to keep records to prove the amount of contributions they made to 501c3 organizations like CRUSA during the year. The kind of records you must keep depends on the amount of your contributions and whether they are cash or non-cash (i.e. in-kind) contributions, and whether they are made in return for something or not (i.e. quid pro quo). The following summary is intended to answer the frequently asked questions that our donors and volunteers have regarding this topic.
DISCLAIMER: By accessing this information, you agree to use it at your own risk and acknowledge that while it is based on our own understanding of current federal rules and regulations, we are not engaged in the business of rendering legal or accounting advice, we are not your counsel, and we neither guarantee nor assume any liability for the accuracy of the information so provided or its fit to your particular tax situation. You should consult your own attorney and/or accountant to determine how the rules apply to your particular circumstances. More detailed information can also be found in IRS Publication 526 (Charitable Contributions) and IRS Publication 561 (Determining the Value of Donated Property) which can be downloaded from the IRS website.
Contributions Consisting of Services Rendered
Contributions consisting of services rendered to a 501c3 organization are NOT deductible and we therefore cannot issue you a tax receipt. These would include legal services, accounting services, veterinary services and administrative services, among others. The logic behind this is that for the donation to be deductible, the phantom income would have to be recognized by the service provider. Depending on the service provider’s adjustable gross income for the year (AGI), that would result in either a wash (i.e. netting zero) or in the donor having to pay income tax, since above a certain AGI, only a portion (and not 100%) of your itemized deductions are actually deductible.
Cash contributions include those paid by cash, check, credit card, or payroll deduction. They also include your out-of-pocket expenses incurred in rendering services to CRUSA. Cash contributions are generally deductible in the year they are made. A few additional rules apply to the deductibility of out-of-pocket expenses and these are explained below. For a contribution made in cash, the records you must keep depend on whether the contribution is (1) less than $250 or (2) $250 or more.
In figuring whether your contribution is $250 or more, you do NOT combine separate contributions. For example, if you give CRUSA a monthly contribution of $25, your monthly payments do not have to be combined. Each payment is a separate contribution. If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution. If you made a payment that is partly for goods and services (i.e. a Quid Pro Quo donation, as explained below), your contribution is the amount of the payment that is more than the fair market value of the goods and services.
Cash Contributions of Less Than $250
For each cash contribution that is less than $250, you must keep ONE of the following.
Cash Contributions of $250 or More
For contributions of $250 or more, IRS rules require that you obtain a written acknowledgement of your contribution from the 501c3 organization (in our case, from CRUSA) or that you keep certain payroll deduction records if you made the contribution via payroll. If you make more than one contribution of $250 or more, you must have either a separate acknowledgement for each or one acknowledgement that shows your total contributions. The acknowledgment must indicate the amount contributed and the date the contribution was made, must contain a statement as to whether or not you received any goods or services as a result of your contribution (other than token items and intangible benefits), and if you did, it must contain a brief description of such goods/services and give you the charity’s good faith estimate of their fair market value. We number and keep copies of all receipts issued, so if you did not receive yours or have lost or misplaced your copy, you can contact us and we will mail you a replacement copy.
If you made your contribution by payroll deduction, you do not need a tax receipt from CRUSA. You should however keep your pay stub(s), Form W-2, or other document furnished by your employer that proves the amount withheld, and if the contribution made was more than $250 you should get a letter confirming that the organization does not provide goods or services in return for any contribution made to it by payroll deduction. You may view our Confirmation Letter here.
Out-Of-Pocket Expenses Incurred In Rendering Services To CRUSA
You may be able to deduct some amounts you pay in rendering services to CRUSA. These amounts are treated as cash donations but they do NOT have to be reflected in our books and/or financial results. Per IRS rules, the amounts must be:
Examples include photocopying charges, office supplies, postage used to mail CRUSA packages or other CRUSA correspondence, cards used to send CRUSA thank yous to donors, and certain travel expenses as further described below.
Attending Not-For-Profit or Animal Welfare Conventions
and/or Training Seminars
If you attend a Not-For-Profit or Animal Welfare convention or a training seminar at the request of CRUSA, you can deduct unreimbursed expenses for travel and transportation, including a reasonable amount for meals and lodging, while away from home overnight in connection with such convention or seminar. You cannot however deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. You also cannot deduct travel, meals and lodging, and other expenses for your spouse or children. Although not necessary, CRUSA will give you an Acknowledgment confirming that you attended the event on CRUSA’s behalf. You are then responsible for saving the relevant receipts for your expenses (please do not mail these to us, as we may lose them), attaching them to the Acknowledgment, and saving these documents with your other tax records.
Other Travel & Car Expenses
Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for CRUSA only if there is NO SIGNIFICANT element of personal pleasure, recreation or vacation in the travel. Note that feeling good about helping our dogs, enjoying providing services to CRUSA generally, and enjoying the trip are allowed and do not affect the deductibility of the expenses incurred. A dog transport is a perfect example, as is traveling to represent CRUSA at a Pet Fair. Because these travel expenses are not business-related, they are not subject to the same limits as business related expenses and the full amount can be deducted as charitable contributions. Please note the rules on mileage below.
Deductible travel expenses include unreimbursed air, rail, and bus transportation; out-of-pocket expenses for your car; taxi fares or other costs of transportation between the airport or station and your hotel; lodging costs; and the cost of meals. Please note however, that for car expenses you can deduct only those expenses that are directly related to the use of your car in giving services to CRUSA, such as the cost of gas and depending on the circumstances, oil, but not general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. You can also deduct parking fees and tolls, whether you use your actual expenses or the standard mileage rate.
You must keep reliable written records of your car expenses and trips. Your records must show for each time you used your car for a charitable purpose, the name of the organization you were serving (in our case, CRUSA) and the date you rendered the service. If you use the standard mileage rate, your records must also show the miles you drove your car for the charitable purpose. If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to the charitable purpose. For ease of record-keeping, we have included here a Travel Log (for dog transports) and an Acknowledgment (for single events). It is not necessary that we (CRUSA) sign these but if you complete them, we will sign them so you will have more reliable records to back the deductions on your tax returns. Please do not send your receipts with these as we may lose them. Send only the forms.
Costs Of Raffle Tickets, Bingo, Lottery, Etc.
Please note that with two exceptions, you CANNOT deduct as a charitable contribution the amounts that you pay to buy raffle or lottery tickets or to play bingo or other games of chance. What the charity chooses to call the ticket payment (donation or otherwise) is irrelevant. The two exceptions that would allow you to deduct the price paid for a raffle ticket as a charitable donation are (1) if you return the ticket to the charity before the raffle is held, or (2) if the charity has a Give Back The Prize option and you elect that as your prize at the time you purchase the ticket. If the charity mistakenly gives you a donation receipt for your raffle ticket purchase and you use it, and your return is later audited, the deduction that you have taken will be disallowed (since it violates IRS rules), potentially resulting in you having to restate your return and pay a penalty for the resulting underpayment.
Quid Pro-Quo Donations
These are contributions where you get something worth more than $5 (indexed for inflation, so for 2008, worth more than $8.60) in return for your contribution. An example is a dog adoption donation, where you get the dog that you are adopting, or an Ebay auction donation, where you get the item being auctioned. 501c3 organizations like CRUSA generally must give you a written statement advising you that you may only deduct the amount in excess of the fair market value of the item that you received (remember that dogs are property under our legal system) and giving you the organization’s good faith estimate of that fair market value. We recently revised our fair market value estimates for dogs as follows:
For eBay, the auction description will state that the initial bid price is our good faith estimate of the item’s fair market value and if you are the winning bidder, you can print the auction description with your final bid price as your written record for tax purposes. Just remember that the deductible amount is the difference between the initial bid price and the final bid price, unless you decide and tell us that you do not want the prize, in which case you can deduct your full final bid price. Just remember to keep a copy of the letter or email where you tell us. Also remember to exclude the portion of your payment that is for postage in determining the amount of your donation.
Non-Cash Contributions (In-Kind Contributions)
In figuring the amount of your in-kind donations, you DO combine your claimed deductions for all similar items of property donated to a particular charity (e.g. CRUSA) during the year. For example, if you donate 10 leashes, 10 collars and 10 harnesses per month to CRUSA, you would have to combine your donations for the year for a total of 120 leashes, 120 collars and 120 harnesses and use the fair market value of the 360 items to determine the amount of your in-kind contribution and the kind of records that you must then keep to substantiate your deduction. If you got goods or services in return for your contribution, it is a Quid Pro Quo Donation, and you must reduce your in-kind contribution by the value of those goods or services received.
Your in-kind donation receipt should include the name and address of the charitable organization (in our case, CRUSA), the date the charitable contribution was made, and a description of the property in detail reasonable under the circumstances. A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing this information will serve as a receipt. You are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site) but you should have other backup when you are claiming a deduction of more than $250. You must also keep record of the fair market value of the property at the time of the contribution and how you figured that fair market value. Please note that with the exception of vehicle donations where special rules apply, the charity does NOT set the fair market value of your in-kind contribution. That is for you and your accountants to determine in accordance with IRS rules. Generally, it is the lower of your acquisition cost and the item’s fair market value. For new items, you would generally use your acquisition cost, whereas for used items you may want to check Ebay for non-charitable sales of the same or similar used item and print the result of that auction as substantiation of the fair market value of the item you donated. For items that you make, the rules generally limit your deduction to your acquisition costs for the materials you used to make the item. Special rules apply to the donation of vehicles where your donation is limited to the amount that the charity sold the donated vehicle for, but at this time CRUSA does not accept vehicle donations. For items over $5,000, you must obtain a written appraisal of the donated property from a qualified appraiser. In addition, if you attach any special terms or conditions to the gift of property, your receipt (and the fair market value you assign to the property contributed) must also reflect that. As with cash receipts, the receipt must state whether the qualified organization gave you any goods or services as a result of your contribution (other than token items and intangible membership benefits).
For in-kind donations to CRUSA, we ask that you complete our In-Kind Donation Receipt and forward it to us for signature, as per the instructions.
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