FundSvcs Community

Very simply stated, a legal donor is an entity that has legal dominion/control over an asset that is given freely to an organization. And so that normally is the person who sends you the money. But you can also convey that authority to someone else (legal agent). And in the case of a minor child, it seems pretty legitimate that the parent would serve in that capacity especially if the child does not have their own checking account. I would, though, wonder why a parent would insist on a minor child getting a tax receipt as that is not going to impact taxes. Are you sure they don't simply want "Little Billy" to be recognized? I did write the IRS once and asked about a similar scenario regarding a gift made by a credit card. Agent Johnson (#5906761) stated: "Based on the scenario provided, if the credit card that was used is in the name of one individual, and if it is equal to or greater than $250.00, the acknowledgement that you would send would only include the individual taxpayer s name. For a taxpayer to claim a charitable contribution on their tax return, they would need to contribute directly to the organization so that the organization would have the appropriate information to send to the taxpayer if it is warranted." Now, the issue of legal agency has been written about by the IRS in great detail and stipulates that there must be a written agreement between the two consenting parties. But I dare say that those papers were not talking about parents and their kids :-). John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 10:34 AM Don Martin <dmartin@sps.edu> wrote: > Hi All; > > I have an e-mail from a parent who sent us a small check last month on > behalf of their son. It included a nice little note about "this money is > actually from little Billy, who gave us the cash" and "we just wrote the > check." > > This happens all the time, but rarely is there a follow-up e-mail from the > donor, so now I realize that perhaps I've never had to explain this to a > donor before. I've always gone by the rule that the legal donor is the > entity last in possession of the asset, so I recorded the gift in the > parents' record, soft-crediting little Billy, but now they want me to > "correct it," and I'm putting together an e-mail to explain why I recorded > it as I did. > > So, other than the Good Book from CASE, I'm trying to find an IRS > publication that can clearly illustrate that I needed to do what I did. > What IRS publication am I looking for? I've done several searches and > can't seem to find one of the most basic rules in the biz. > > Thanks in advance from someone who really needs more coffee. > > Don > > Donald P. Martin, Jr. > Gifts Manager > St. Paul’s School > dmartin@sps.edu > > This email and any files transmitted with it are confidential and intended > solely for the use of the individual or entity to whom they are addressed. > If you have received this email in error, please notify the sender and do > not disseminate, distribute or copy this e-mail. > If shredding is impossible, please consider taking little bites of it, > chewing it up real good with some barbeque sauce, and ingesting it like one > would a fine smoky confection. Also, this isn't really my disclaimer, it's > just Wednesday and I was wondering if John would notice. > > >

Now that I have had more coffee . . . The IRS Agent would say that for $25 no receipt is required period and let the donor claim whatever they want with their canceled check :-). John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 11:35 AM Don Martin <dmartin@sps.edu> wrote: > Thanks, John – > > > > Just for full disclosure, “Little Billy” is 18 or 19 and a college student > who just happened to not have his checkbook with him at the time, so not a > minor. The “Little” was perhaps deceiving. :^) > > > > I wonder what Agent Johnson would have said about a gift about 1/10th the > size of the $250 contribution… > > > > Don > > > > PS Heartbroken that you didn’t notice my disclaimer! LOL > > > > *From:* Advancement Services Discussion List < > FUNDSVCS@LISTSERV.FUNDSVCS.ORG> *On Behalf Of *John Taylor > *Sent:* Wednesday, January 23, 2019 11:19 AM > *To:* FUNDSVCS@LISTSERV.FUNDSVCS.ORG > *Subject:* Re: [FUNDSVCS] IRS Definition of "Legal Donor" > > > > Very simply stated, a legal donor is an entity that has legal > dominion/control over an asset that is given freely to an organization. > And so that normally is the person who sends you the money. But you can > also convey that authority to someone else (legal agent). And in the case > of a minor child, it seems pretty legitimate that the parent would serve in > that capacity especially if the child does not have their own checking > account. > > > > I would, though, wonder why a parent would insist on a minor child getting > a tax receipt as that is not going to impact taxes. Are you sure they > don't simply want "Little Billy" to be recognized? > > > > I did write the IRS once and asked about a similar scenario regarding a > gift made by a credit card. Agent Johnson (#5906761) stated: > > > > "Based on the scenario provided, if the credit card that was used is in > the name of one individual, and if it is equal to or greater than $250.00, > the acknowledgement that you would send would only include the individual > taxpayer s name. For a taxpayer to claim a charitable contribution on > their tax return, they would need to contribute directly to the > organization so that the organization would have the appropriate > information to send to the taxpayer if it is warranted." > > > > Now, the issue of legal agency has been written about by the IRS in great > detail and stipulates that there must be a written agreement between the > two consenting parties. But I dare say that those papers were not talking > about parents and their kids :-). > > > > John > > > > John H. Taylor > > Principal, John H. Taylor Consulting > > 2604 Sevier St. > > Durham, NC 27705 > > johntaylorconsulting@gmail.com > > 919.816.5903 (cell/text) > > > > Serving the Advancement Community Since 1987 > > > > > > On Wed, Jan 23, 2019 at 10:34 AM Don Martin <dmartin@sps.edu> wrote: > > Hi All; > > I have an e-mail from a parent who sent us a small check last month on > behalf of their son. It included a nice little note about "this money is > actually from little Billy, who gave us the cash" and "we just wrote the > check." > > This happens all the time, but rarely is there a follow-up e-mail from the > donor, so now I realize that perhaps I've never had to explain this to a > donor before. I've always gone by the rule that the legal donor is the > entity last in possession of the asset, so I recorded the gift in the > parents' record, soft-crediting little Billy, but now they want me to > "correct it," and I'm putting together an e-mail to explain why I recorded > it as I did. > > So, other than the Good Book from CASE, I'm trying to find an IRS > publication that can clearly illustrate that I needed to do what I did. > What IRS publication am I looking for? I've done several searches and > can't seem to find one of the most basic rules in the biz. > > Thanks in advance from someone who really needs more coffee. > > Don > > Donald P. Martin, Jr. > Gifts Manager > St. Paul’s School > dmartin@sps.edu > > This email and any files transmitted with it are confidential and intended > solely for the use of the individual or entity to whom they are addressed. > If you have received this email in error, please notify the sender and do > not disseminate, distribute or copy this e-mail. If shredding is > impossible, please consider taking little bites of it, chewing it up real > good with some barbeque sauce, and ingesting it like one would a fine smoky > confection. Also, this isn't really my disclaimer, it's just Wednesday and > I was wondering if John would notice. > >

Hi All; I have an e-mail from a parent who sent us a small check last month on behalf of their son. It included a nice little note about "this money is actually from little Billy, who gave us the cash" and "we just wrote the check." This happens all the time, but rarely is there a follow-up e-mail from the donor, so now I realize that perhaps I've never had to explain this to a donor before. I've always gone by the rule that the legal donor is the entity last in possession of the asset, so I recorded the gift in the parents' record, soft-crediting little Billy, but now they want me to "correct it," and I'm putting together an e-mail to explain why I recorded it as I did. So, other than the Good Book from CASE, I'm trying to find an IRS publication that can clearly illustrate that I needed to do what I did. What IRS publication am I looking for? I've done several searches and can't seem to find one of the most basic rules in the biz. Thanks in advance from someone who really needs more coffee. Don Donald P. Martin, Jr. Gifts Manager St. Paul’s School dmartin@sps.edu This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error, please notify the sender and do not disseminate, distribute or copy this e-mail.  If shredding is impossible, please consider taking little bites of it, chewing it up real good with some barbeque sauce, and ingesting it like one would a fine smoky confection. Also, this isn't really my disclaimer, it's just Wednesday and I was wondering if John would notice.

Thanks, John – Just for full disclosure, “Little Billy” is 18 or 19 and a college student who just happened to not have his checkbook with him at the time, so not a minor. The “Little” was perhaps deceiving. :^) I wonder what Agent Johnson would have said about a gift about 1/10th the size of the $250 contribution… Don PS Heartbroken that you didn’t notice my disclaimer! LOL From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 11:19 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Very simply stated, a legal donor is an entity that has legal dominion/control over an asset that is given freely to an organization. And so that normally is the person who sends you the money. But you can also convey that authority to someone else (legal agent). And in the case of a minor child, it seems pretty legitimate that the parent would serve in that capacity especially if the child does not have their own checking account. I would, though, wonder why a parent would insist on a minor child getting a tax receipt as that is not going to impact taxes. Are you sure they don't simply want "Little Billy" to be recognized? I did write the IRS once and asked about a similar scenario regarding a gift made by a credit card. Agent Johnson (#5906761) stated: "Based on the scenario provided, if the credit card that was used is in the name of one individual, and if it is equal to or greater than $250.00, the acknowledgement that you would send would only include the individual taxpayer s name. For a taxpayer to claim a charitable contribution on their tax return, they would need to contribute directly to the organization so that the organization would have the appropriate information to send to the taxpayer if it is warranted." Now, the issue of legal agency has been written about by the IRS in great detail and stipulates that there must be a written agreement between the two consenting parties. But I dare say that those papers were not talking about parents and their kids :-). John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 10:34 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Hi All; I have an e-mail from a parent who sent us a small check last month on behalf of their son. It included a nice little note about "this money is actually from little Billy, who gave us the cash" and "we just wrote the check." This happens all the time, but rarely is there a follow-up e-mail from the donor, so now I realize that perhaps I've never had to explain this to a donor before. I've always gone by the rule that the legal donor is the entity last in possession of the asset, so I recorded the gift in the parents' record, soft-crediting little Billy, but now they want me to "correct it," and I'm putting together an e-mail to explain why I recorded it as I did. So, other than the Good Book from CASE, I'm trying to find an IRS publication that can clearly illustrate that I needed to do what I did. What IRS publication am I looking for? I've done several searches and can't seem to find one of the most basic rules in the biz. Thanks in advance from someone who really needs more coffee. Don Donald P. Martin, Jr. Gifts Manager St. Paul’s School dmartin@sps.edu<mailto:dmartin@sps.edu> This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error, please notify the sender and do not disseminate, distribute or copy this e-mail. If shredding is impossible, please consider taking little bites of it, chewing it up real good with some barbeque sauce, and ingesting it like one would a fine smoky confection. Also, this isn't really my disclaimer, it's just Wednesday and I was wondering if John would notice.

I would only add that the question “Who is the legal donor?” is a question that makes sense from our perspective, but the question in its native setting is more likely to be the IRS asking the taxpayer, “Show me the documentation that you are the entity that made this charitable contribution.” What makes this more interesting, from our perspective, is that the taxpayer may well present the IRS agent with our receipt saying “Here, I have this tax document from the charity that states that I made the charitable contribution.” So we need to be careful in providing a tax document that says who made the contribution, which gives rise to the question that we commonly ask. Certainly, parents (or guardians) do lots of things for their children, but I don’t know what the law says about a parent acting on behalf of the child, or how it applies to this case. Not issuing a receipt is probably a good option, since the donor (whoever that is) is unlikely to be deducting this gift. Checking with counsel would be another good option. If neither of those is possible, I might think about an idiosyncratic receipt describing the circumstances (check drawn on the account of Jane Smith, with an annotation that the gift was being made on behalf of her son, Billy Smith, or some such). Now, if I had a letter from Billy and his parents enclosing the check and telling me that he had his parents write the check since he doesn’t have a checking account but that he gave his parents the money, it seems like that would cover all the bases. My US$0.02 worth; the usual disclaimers apply. Good luck! Alan Alan S. Hejnal Data Quality Manager Smithsonian Institution - Office of Advancement 600 Maryland Avenue SW, Suite 600E P.O. Box 37012, MRC 527 Washington, DC 20013-7012 •: 202-633-8754 | •: HejnalA@si.edu<mailto:HejnalA@si.edu> [SNAGHTML5cbfa34]<https://www.si.edu/> [AASP_FundSvcs_LOGO-01(040pct)(mark)] From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 12:23 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Now that I have had more coffee . . . The IRS Agent would say that for $25 no receipt is required period and let the donor claim whatever they want with their canceled check :-). John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 11:35 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Thanks, John – Just for full disclosure, “Little Billy” is 18 or 19 and a college student who just happened to not have his checkbook with him at the time, so not a minor. The “Little” was perhaps deceiving. :^) I wonder what Agent Johnson would have said about a gift about 1/10th the size of the $250 contribution… Don PS Heartbroken that you didn’t notice my disclaimer! LOL From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 11:19 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Very simply stated, a legal donor is an entity that has legal dominion/control over an asset that is given freely to an organization. And so that normally is the person who sends you the money. But you can also convey that authority to someone else (legal agent). And in the case of a minor child, it seems pretty legitimate that the parent would serve in that capacity especially if the child does not have their own checking account. I would, though, wonder why a parent would insist on a minor child getting a tax receipt as that is not going to impact taxes. Are you sure they don't simply want "Little Billy" to be recognized? I did write the IRS once and asked about a similar scenario regarding a gift made by a credit card. Agent Johnson (#5906761) stated: "Based on the scenario provided, if the credit card that was used is in the name of one individual, and if it is equal to or greater than $250.00, the acknowledgement that you would send would only include the individual taxpayer s name. For a taxpayer to claim a charitable contribution on their tax return, they would need to contribute directly to the organization so that the organization would have the appropriate information to send to the taxpayer if it is warranted." Now, the issue of legal agency has been written about by the IRS in great detail and stipulates that there must be a written agreement between the two consenting parties. But I dare say that those papers were not talking about parents and their kids :-). John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 10:34 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Hi All; I have an e-mail from a parent who sent us a small check last month on behalf of their son. It included a nice little note about "this money is actually from little Billy, who gave us the cash" and "we just wrote the check." This happens all the time, but rarely is there a follow-up e-mail from the donor, so now I realize that perhaps I've never had to explain this to a donor before. I've always gone by the rule that the legal donor is the entity last in possession of the asset, so I recorded the gift in the parents' record, soft-crediting little Billy, but now they want me to "correct it," and I'm putting together an e-mail to explain why I recorded it as I did. So, other than the Good Book from CASE, I'm trying to find an IRS publication that can clearly illustrate that I needed to do what I did. What IRS publication am I looking for? I've done several searches and can't seem to find one of the most basic rules in the biz. Thanks in advance from someone who really needs more coffee. Don Donald P. Martin, Jr. Gifts Manager St. Paul’s School dmartin@sps.edu<mailto:dmartin@sps.edu> This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error, please notify the sender and do not disseminate, distribute or copy this e-mail. If shredding is impossible, please consider taking little bites of it, chewing it up real good with some barbeque sauce, and ingesting it like one would a fine smoky confection. Also, this isn't really my disclaimer, it's just Wednesday and I was wondering if John would notice.

Another possible approach is to tell the parents that receipts are issued to the party that last transferred ownership of the asset regardless of circumstances. If they wish they could have w written the check to Little Billy who could have then endorsed it payable to your entity. Then the last owner and direct contributor would be Little Billy. Bob Swanson, CPA Controller Bowling Green State University 1851 N. Research Drive Bowling Green, Ohio 43403 rswanso@bgsu.edu<mailto:rswanso@bgsu.edu> w 419.372.8597 From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Hejnal, Alan Sent: Wednesday, January 23, 2019 12:59 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" I would only add that the question “Who is the legal donor?” is a question that makes sense from our perspective, but the question in its native setting is more likely to be the IRS asking the taxpayer, “Show me the documentation that you are the entity that made this charitable contribution.” What makes this more interesting, from our perspective, is that the taxpayer may well present the IRS agent with our receipt saying “Here, I have this tax document from the charity that states that I made the charitable contribution.” So we need to be careful in providing a tax document that says who made the contribution, which gives rise to the question that we commonly ask. Certainly, parents (or guardians) do lots of things for their children, but I don’t know what the law says about a parent acting on behalf of the child, or how it applies to this case. Not issuing a receipt is probably a good option, since the donor (whoever that is) is unlikely to be deducting this gift. Checking with counsel would be another good option. If neither of those is possible, I might think about an idiosyncratic receipt describing the circumstances (check drawn on the account of Jane Smith, with an annotation that the gift was being made on behalf of her son, Billy Smith, or some such). Now, if I had a letter from Billy and his parents enclosing the check and telling me that he had his parents write the check since he doesn’t have a checking account but that he gave his parents the money, it seems like that would cover all the bases. My US$0.02 worth; the usual disclaimers apply. Good luck! Alan Alan S. Hejnal Data Quality Manager Smithsonian Institution - Office of Advancement 600 Maryland Avenue SW, Suite 600E P.O. Box 37012, MRC 527 Washington, DC 20013-7012 •: 202-633-8754 | •: HejnalA@si.edu<mailto:HejnalA@si.edu> [SNAGHTML5cbfa34]<https://www.si.edu/> [AASP_FundSvcs_LOGO-01(040pct)(mark)] From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 12:23 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Now that I have had more coffee . . . The IRS Agent would say that for $25 no receipt is required period and let the donor claim whatever they want with their canceled check :-). John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 11:35 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Thanks, John – Just for full disclosure, “Little Billy” is 18 or 19 and a college student who just happened to not have his checkbook with him at the time, so not a minor. The “Little” was perhaps deceiving. :^) I wonder what Agent Johnson would have said about a gift about 1/10th the size of the $250 contribution… Don PS Heartbroken that you didn’t notice my disclaimer! LOL From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 11:19 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Very simply stated, a legal donor is an entity that has legal dominion/control over an asset that is given freely to an organization. And so that normally is the person who sends you the money. But you can also convey that authority to someone else (legal agent). And in the case of a minor child, it seems pretty legitimate that the parent would serve in that capacity especially if the child does not have their own checking account. I would, though, wonder why a parent would insist on a minor child getting a tax receipt as that is not going to impact taxes. Are you sure they don't simply want "Little Billy" to be recognized? I did write the IRS once and asked about a similar scenario regarding a gift made by a credit card. Agent Johnson (#5906761) stated: "Based on the scenario provided, if the credit card that was used is in the name of one individual, and if it is equal to or greater than $250.00, the acknowledgement that you would send would only include the individual taxpayer s name. For a taxpayer to claim a charitable contribution on their tax return, they would need to contribute directly to the organization so that the organization would have the appropriate information to send to the taxpayer if it is warranted." Now, the issue of legal agency has been written about by the IRS in great detail and stipulates that there must be a written agreement between the two consenting parties. But I dare say that those papers were not talking about parents and their kids :-). John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 10:34 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Hi All; I have an e-mail from a parent who sent us a small check last month on behalf of their son. It included a nice little note about "this money is actually from little Billy, who gave us the cash" and "we just wrote the check." This happens all the time, but rarely is there a follow-up e-mail from the donor, so now I realize that perhaps I've never had to explain this to a donor before. I've always gone by the rule that the legal donor is the entity last in possession of the asset, so I recorded the gift in the parents' record, soft-crediting little Billy, but now they want me to "correct it," and I'm putting together an e-mail to explain why I recorded it as I did. So, other than the Good Book from CASE, I'm trying to find an IRS publication that can clearly illustrate that I needed to do what I did. What IRS publication am I looking for? I've done several searches and can't seem to find one of the most basic rules in the biz. Thanks in advance from someone who really needs more coffee. Don Donald P. Martin, Jr. Gifts Manager St. Paul’s School dmartin@sps.edu<mailto:dmartin@sps.edu> This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error, please notify the sender and do not disseminate, distribute or copy this e-mail. If shredding is impossible, please consider taking little bites of it, chewing it up real good with some barbeque sauce, and ingesting it like one would a fine smoky confection. Also, this isn't really my disclaimer, it's just Wednesday and I was wondering if John would notice.

Clever. Assuming, I suppose, that your bank lets you deposit third-party checks. My US$0.02 worth; the usual disclaimers apply. Good luck! Alan Alan S. Hejnal Data Quality Manager Smithsonian Institution - Office of Advancement 600 Maryland Avenue SW, Suite 600E P.O. Box 37012, MRC 527 Washington, DC 20013-7012 •: 202-633-8754 | •: HejnalA@si.edu<mailto:HejnalA@si.edu> [SNAGHTML5cbfa34]<https://www.si.edu/> [AASP_FundSvcs_LOGO-01(040pct)(mark)] From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Bob Swanson Sent: Wednesday, January 23, 2019 1:29 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Another possible approach is to tell the parents that receipts are issued to the party that last transferred ownership of the asset regardless of circumstances. If they wish they could have w written the check to Little Billy who could have then endorsed it payable to your entity. Then the last owner and direct contributor would be Little Billy. Bob Swanson, CPA Controller Bowling Green State University 1851 N. Research Drive Bowling Green, Ohio 43403 rswanso@bgsu.edu<mailto:rswanso@bgsu.edu> w 419.372.8597 From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of Hejnal, Alan Sent: Wednesday, January 23, 2019 12:59 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" I would only add that the question “Who is the legal donor?” is a question that makes sense from our perspective, but the question in its native setting is more likely to be the IRS asking the taxpayer, “Show me the documentation that you are the entity that made this charitable contribution.” What makes this more interesting, from our perspective, is that the taxpayer may well present the IRS agent with our receipt saying “Here, I have this tax document from the charity that states that I made the charitable contribution.” So we need to be careful in providing a tax document that says who made the contribution, which gives rise to the question that we commonly ask. Certainly, parents (or guardians) do lots of things for their children, but I don’t know what the law says about a parent acting on behalf of the child, or how it applies to this case. Not issuing a receipt is probably a good option, since the donor (whoever that is) is unlikely to be deducting this gift. Checking with counsel would be another good option. If neither of those is possible, I might think about an idiosyncratic receipt describing the circumstances (check drawn on the account of Jane Smith, with an annotation that the gift was being made on behalf of her son, Billy Smith, or some such). Now, if I had a letter from Billy and his parents enclosing the check and telling me that he had his parents write the check since he doesn’t have a checking account but that he gave his parents the money, it seems like that would cover all the bases. My US$0.02 worth; the usual disclaimers apply. Good luck! Alan Alan S. Hejnal Data Quality Manager Smithsonian Institution - Office of Advancement 600 Maryland Avenue SW, Suite 600E P.O. Box 37012, MRC 527 Washington, DC 20013-7012 •: 202-633-8754 | •: HejnalA@si.edu<mailto:HejnalA@si.edu> [SNAGHTML5cbfa34]<https://www.si.edu/> [AASP_FundSvcs_LOGO-01(040pct)(mark)] From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 12:23 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Now that I have had more coffee . . . The IRS Agent would say that for $25 no receipt is required period and let the donor claim whatever they want with their canceled check :-). John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 11:35 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Thanks, John – Just for full disclosure, “Little Billy” is 18 or 19 and a college student who just happened to not have his checkbook with him at the time, so not a minor. The “Little” was perhaps deceiving. :^) I wonder what Agent Johnson would have said about a gift about 1/10th the size of the $250 contribution… Don PS Heartbroken that you didn’t notice my disclaimer! LOL From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 11:19 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Very simply stated, a legal donor is an entity that has legal dominion/control over an asset that is given freely to an organization. And so that normally is the person who sends you the money. But you can also convey that authority to someone else (legal agent). And in the case of a minor child, it seems pretty legitimate that the parent would serve in that capacity especially if the child does not have their own checking account. I would, though, wonder why a parent would insist on a minor child getting a tax receipt as that is not going to impact taxes. Are you sure they don't simply want "Little Billy" to be recognized? I did write the IRS once and asked about a similar scenario regarding a gift made by a credit card. Agent Johnson (#5906761) stated: "Based on the scenario provided, if the credit card that was used is in the name of one individual, and if it is equal to or greater than $250.00, the acknowledgement that you would send would only include the individual taxpayer s name. For a taxpayer to claim a charitable contribution on their tax return, they would need to contribute directly to the organization so that the organization would have the appropriate information to send to the taxpayer if it is warranted." Now, the issue of legal agency has been written about by the IRS in great detail and stipulates that there must be a written agreement between the two consenting parties. But I dare say that those papers were not talking about parents and their kids :-). John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 10:34 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Hi All; I have an e-mail from a parent who sent us a small check last month on behalf of their son. It included a nice little note about "this money is actually from little Billy, who gave us the cash" and "we just wrote the check." This happens all the time, but rarely is there a follow-up e-mail from the donor, so now I realize that perhaps I've never had to explain this to a donor before. I've always gone by the rule that the legal donor is the entity last in possession of the asset, so I recorded the gift in the parents' record, soft-crediting little Billy, but now they want me to "correct it," and I'm putting together an e-mail to explain why I recorded it as I did. So, other than the Good Book from CASE, I'm trying to find an IRS publication that can clearly illustrate that I needed to do what I did. What IRS publication am I looking for? I've done several searches and can't seem to find one of the most basic rules in the biz. Thanks in advance from someone who really needs more coffee. Don Donald P. Martin, Jr. Gifts Manager St. Paul’s School dmartin@sps.edu<mailto:dmartin@sps.edu> This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error, please notify the sender and do not disseminate, distribute or copy this e-mail. If shredding is impossible, please consider taking little bites of it, chewing it up real good with some barbeque sauce, and ingesting it like one would a fine smoky confection. Also, this isn't really my disclaimer, it's just Wednesday and I was wondering if John would notice.

That is clever indeed, Bob. If I had just been in the room with them at the time! :^) It has taken me all day to write my response e-mail, and I am having a difficult time sending it now that it’s complete. Don Donald P. Martin, Jr. Gifts Manager St. Paul’s School dmartin@sps.edu<mailto:dmartin@sps.edu> From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG> On Behalf Of Bob Swanson Sent: Wednesday, January 23, 2019 1:29 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Another possible approach is to tell the parents that receipts are issued to the party that last transferred ownership of the asset regardless of circumstances. If they wish they could have w written the check to Little Billy who could have then endorsed it payable to your entity. Then the last owner and direct contributor would be Little Billy. Bob Swanson, CPA Controller Bowling Green State University 1851 N. Research Drive Bowling Green, Ohio 43403 rswanso@bgsu.edu<mailto:rswanso@bgsu.edu> w 419.372.8597 From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of Hejnal, Alan Sent: Wednesday, January 23, 2019 12:59 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" I would only add that the question “Who is the legal donor?” is a question that makes sense from our perspective, but the question in its native setting is more likely to be the IRS asking the taxpayer, “Show me the documentation that you are the entity that made this charitable contribution.” What makes this more interesting, from our perspective, is that the taxpayer may well present the IRS agent with our receipt saying “Here, I have this tax document from the charity that states that I made the charitable contribution.” So we need to be careful in providing a tax document that says who made the contribution, which gives rise to the question that we commonly ask. Certainly, parents (or guardians) do lots of things for their children, but I don’t know what the law says about a parent acting on behalf of the child, or how it applies to this case. Not issuing a receipt is probably a good option, since the donor (whoever that is) is unlikely to be deducting this gift. Checking with counsel would be another good option. If neither of those is possible, I might think about an idiosyncratic receipt describing the circumstances (check drawn on the account of Jane Smith, with an annotation that the gift was being made on behalf of her son, Billy Smith, or some such). Now, if I had a letter from Billy and his parents enclosing the check and telling me that he had his parents write the check since he doesn’t have a checking account but that he gave his parents the money, it seems like that would cover all the bases. My US$0.02 worth; the usual disclaimers apply. Good luck! Alan Alan S. Hejnal Data Quality Manager Smithsonian Institution - Office of Advancement 600 Maryland Avenue SW, Suite 600E P.O. Box 37012, MRC 527 Washington, DC 20013-7012 •: 202-633-8754 | •: HejnalA@si.edu<mailto:HejnalA@si.edu> [SNAGHTML5cbfa34]<https://urldefense.proofpoint.com/v2/url?u=https-3A__www.si.edu_&d=DwMGaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=TL_LhCsGQ8wniPl8EHJr3Q&m=Pj-Ab-cAhvoUMR3KKQA1_PuxDcKwD1MhcWsW6JbeBl4&s=7LCtaN-q5ZDcz_Eu2Cyux8JsBHZcyV_qtbPSV3YRfEg&e=> [AASP_FundSvcs_LOGO-01(040pct)(mark)] From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 12:23 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Now that I have had more coffee . . . The IRS Agent would say that for $25 no receipt is required period and let the donor claim whatever they want with their canceled check :-). John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 11:35 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Thanks, John – Just for full disclosure, “Little Billy” is 18 or 19 and a college student who just happened to not have his checkbook with him at the time, so not a minor. The “Little” was perhaps deceiving. :^) I wonder what Agent Johnson would have said about a gift about 1/10th the size of the $250 contribution… Don PS Heartbroken that you didn’t notice my disclaimer! LOL From: Advancement Services Discussion List <FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>> On Behalf Of John Taylor Sent: Wednesday, January 23, 2019 11:19 AM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] IRS Definition of "Legal Donor" Very simply stated, a legal donor is an entity that has legal dominion/control over an asset that is given freely to an organization. And so that normally is the person who sends you the money. But you can also convey that authority to someone else (legal agent). And in the case of a minor child, it seems pretty legitimate that the parent would serve in that capacity especially if the child does not have their own checking account. I would, though, wonder why a parent would insist on a minor child getting a tax receipt as that is not going to impact taxes. Are you sure they don't simply want "Little Billy" to be recognized? I did write the IRS once and asked about a similar scenario regarding a gift made by a credit card. Agent Johnson (#5906761) stated: "Based on the scenario provided, if the credit card that was used is in the name of one individual, and if it is equal to or greater than $250.00, the acknowledgement that you would send would only include the individual taxpayer s name. For a taxpayer to claim a charitable contribution on their tax return, they would need to contribute directly to the organization so that the organization would have the appropriate information to send to the taxpayer if it is warranted." Now, the issue of legal agency has been written about by the IRS in great detail and stipulates that there must be a written agreement between the two consenting parties. But I dare say that those papers were not talking about parents and their kids :-). John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Wed, Jan 23, 2019 at 10:34 AM Don Martin <dmartin@sps.edu<mailto:dmartin@sps.edu>> wrote: Hi All; I have an e-mail from a parent who sent us a small check last month on behalf of their son. It included a nice little note about "this money is actually from little Billy, who gave us the cash" and "we just wrote the check." This happens all the time, but rarely is there a follow-up e-mail from the donor, so now I realize that perhaps I've never had to explain this to a donor before. I've always gone by the rule that the legal donor is the entity last in possession of the asset, so I recorded the gift in the parents' record, soft-crediting little Billy, but now they want me to "correct it," and I'm putting together an e-mail to explain why I recorded it as I did. So, other than the Good Book from CASE, I'm trying to find an IRS publication that can clearly illustrate that I needed to do what I did. What IRS publication am I looking for? I've done several searches and can't seem to find one of the most basic rules in the biz. Thanks in advance from someone who really needs more coffee. Don Donald P. Martin, Jr. Gifts Manager St. Paul’s School dmartin@sps.edu<mailto:dmartin@sps.edu> This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error, please notify the sender and do not disseminate, distribute or copy this e-mail. If shredding is impossible, please consider taking little bites of it, chewing it up real good with some barbeque sauce, and ingesting it like one would a fine smoky confection. Also, this isn't really my disclaimer, it's just Wednesday and I was wondering if John would notice.