Is your OWS donation tax deductible? Does it matter?
OWS money is pouring in, but don't try to deduct your donation to Occupy Wall Street. OWS isn't an official charity.
Donations are pouring in to local Occupy websites across the country and around the world. Want to contribute to the protest movement in your city? It鈥檚 perfectly legal, as long as you don鈥檛 mark it as a deduction on your taxes.
As the Occupy Wall Street protests in Manhattan鈥檚 Zuccotti Park roll through their second month, online donations for things like food, shelter, computer support, and the OWS print newspaper fund are hovering right around $500,000. In Boston, where protesters have been occupying Dewey Square for the past month, donations are currently at $24,980 and rising.
鈥淩ight now our biggest priority is winterization, so some donations will go toward snow removal, and different options that we are looking into for shelter," says Eric Martin, a member of Occupy Boston's financial accountability working group. "We want to make sure that everyone is warm, comfortable, and safe.鈥�
Despite the money they鈥檙e pulling in, the Occupy movements are not registered as tax-exempt nonprofits or charities. According to Jeffrey Levine, a certified public accountant and member of the Massachusetts Society of Certified Public Aaccountants, this isn鈥檛 really a problem. A gift to the Occupy movement is your prerogative; just don鈥檛 mark it on your tax return.
鈥淒onors aren鈥檛 running any risk as long as they don鈥檛 mark it as a charitable deduction. [Occupy Boston] could at some point obtain nonprofit tax-exempt status, but it probably won鈥檛 be recognized as a charity,鈥� he says.
What鈥檚 the difference between a nonprofit and a charity? Nonprofits (Mr. Levine cited the example of the Massachusetts Chamber of Commerce) don鈥檛 turn a profit and are thereby exempt from taxation. But according to tax law, only contributions to organizations that qualify as charities are allowable tax deductions. Charities must serve the general public interest, and there are nine types under the federal tax code. According to the official language, charities are organizations that:
- Relieve the poor, the distressed, or the underprivileged
- Advance religion
- Advance education or science
- Erect or maintain public buildings, monuments, or works
- Lessen the burdens of government,
- Lessen neighborhood tensions
- Work to eliminate prejudice and discrimination
- Defend human and civil rights secured by law
- Combat community deterioration and juvenile delinquency
Other organizations that qualify are those which test for public safety, foster national or international amateur sports competitions, and prevent cruelty to children or animals.
鈥淥ccupy Boston probably has not made any application to be tax exempt, but they probably should, eventually,鈥� says Levine. 鈥淭hey sound more like a PAC [political action committee] than a charity, to me. I鈥檓 all for the movement, but I don鈥檛 see how they could ever qualify as tax deductible."
聽鈥淲e鈥檙e working on the organizational structure," says Mr. Martin. "We want to be within the law, so we are working with lawyers to come to a decision on registering.鈥�
Paul Fierman, a retired airline pilot living in Woodstock, GA, donated to the movement through the Occupy Wall Street website, and he sees the tax deduction issue as unimportant.
鈥淚t doesn鈥檛 bother me in the least," he says. 鈥淭he longer people are out there spreading their message, the more likely it is to stick. That鈥檚 why I donated. If they have to go home, this thing is going to die. I鈥檒l keep donating as long as they鈥檙e out there.鈥�
Mr. Fireman cites the widening income gap as his reason for donation. 鈥淭hese CEOs are making more in one day than their workers make all year, and that just shouldn鈥檛 be, he says. 鈥淭here has got to be a change of attitude in this country.鈥�
鈥淚 think the protesters have bigger fish to fry than whether they are doing taxes right or not, " Levine added.