86°F
weather icon Mostly Cloudy

Holiday humbugs: Faux nonprofits take donations, lack official exempt status

The holiday season is a time when many people give, but it can also be a time when fake nonprofit organizations try to dupe them out of their money.

To protect themselves from scams and know the recipient of their donation, residents can do some practical things before giving to a charity or nonprofit.

According to the IRS, donations to nonprofits or charitable organizations with tax-exempt status are tax-deductible. That tax-exempt status is provided through the 501(c)3 IRS code. Some nonprofit groups may make it seem as if they have that status when they do not.

“It is not enough for the organization to be nonprofit to make the donation tax-deductible,” said attorney Bruce Woodbury. “It must also apply for and be granted tax-exempt status by the IRS.”

Woodbury, a longtime Boulder City resident, is known for his work helping nonprofits, especially local ones.

“They do so much good,” he said. “I always make sure it’s an organization that’s going to benefit the community.”

Woodbury said there are three simple things people can do to make sure they give to a legitimate nonprofit organization.

The first is to ask the organization for proof that it has the 501(c)3 tax-exempt status.

“You can request a W-9 from them,” he said.

According to the IRS, this form includes the group’s taxpayer identification number and is used when someone requests that information.

A searchable list of the 501(c)3 status for all nonprofits in the country is also available on its website at http://apps.irs.gov/app/eos/.

Woodbury said people should also become as familiar as possible with the nonprofit before donating to it.

One way to do that is to ask if there are people who can vouch for the organization. Additionally, if it’s a group asking for a donation online or over the phone, he always asks to be sent more information.

Lastly, he said, people should give locally if possible.

“There are so many organizations that are part of the fabric of the community,” Woodbury said.

He said two of those are Emergency Aid of Boulder City and Lend A Hand of Boulder City.

Despite all the planning and research, people can still end up giving to what they think is a legitimate charitable donation, claim it on their taxes and then find out they were wrong.

If that happens, however, the person will most likely not be in trouble.

“You don’t become part of the organization just because you donated money. … But the deduction might be disallowed by the IRS if it catches it, which would probably happen only if the taxpayer was audited for some reason,” Woodbury said.

Contact reporter Celia Shortt Goodyear at cgoodyear@bouldercityreview.com or at 702-586-9401. Follow her on Twitter @csgoodyear.

MOST READ
LISTEN TO THE TOP FIVE HERE
THE LATEST
Boulder Theatre to open its doors to events

Whether as a location for builders of Hoover Dam to escape the heat, a place to see movies with families, friends or a date, or a venue to enjoy ballet performances, the Boulder Theatre has been a favorite local historical landmark for nearly a century.

New school hours beginning this year

Students in the Clark County School District will be able to sleep in a little longer this coming school year or will have to set their alarm clocks a bit earlier.

Tennis team looks to defend its title

Coming into the season as defending 3A state champions, Boulder City High School boys tennis is eager to get back out on the court and defend their title.

A quick heart-to-heart with BC

I have a lot on my heart these days. The good news is that my heart is in great health. So… allow me to start with that.

City not moving forward with motel district

It appears that everyone is on the same page in that they want to see motels in Boulder City retain their historic charm.

BC family creates hydration supplement for kids

Like many parents of school-aged children, Boulder City’s Alex and Anabel Smith often find their weekends filled with youth activities and sports.

City proposes utility rate hike

Last week, the city of Boulder City announced a proposal to raise utility rates by 15% over the next three years.