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For those familiar with aggressive athletics programs, I would love your feedback and advice!

Our Athletics program recently sent out its calendar 2023 annual solicitation to its donor and fanbase.  Due to the way the solicitation was written, several fans wrote checks back and/or donated online contributing to the Athletics annual fund (100% charitable).  After receiving their tax receipts, fans called the Athletics department and said that they meant to secure seats for various athletic programs, and not make charitable gifts.  The Athletics department emails us and asks us to adjust these gifts in our system from a charitable account to a non-charitable account despite receipts having gone out already. I've explained multiple times that doing this would make us complicit in facilitating IRS fraud for the "donors" since we've given them a receipt and then subsequently provided them with an impermissable benefit.  Our Athletics department doesn't seem to care and just wants to do what's easiest for them.

My understanding of best practice has been that we should first reach out to these fans and ask them to return their original paper receipts before making the adjustment in our system.  Here's the problem.  The Athletics department consistently pushes back on this saying, "...can we send them a second letter informing them that the receipt is incorrect and cannot be used on their federal tax returns? [We] feel like that would absolve the foundation if the IRS were ever to come to us on something like this. It seems unrealistic to demand someone return a receipt because we really don't have any authority if they choose not to return the receipt and in reality they could just make a copy and use it anyway."

Now, we have done this in the past BUT it's a lot of work because WE have to draft a letter explaining and instructing the donor as to what is going on and why they're getting a second (acknowledgement) letter (each case is slightly different), and we have to send these USPS certified/return receipt to ensure they've gotten them.  We've done it when the number was low, but now we have about a dozen of these and feel the burden is unreasonable.

Has anyone dealt with this and had success in counterarguing their point to their Athletics department?  Thanks!

For those familiar with aggressive athletics programs, I would love your feedback and advice!

Our Athletics program recently sent out its calendar 2023 annual solicitation to its donor and fanbase.  Due to the way the solicitation was written, several fans wrote checks back and/or donated online contributing to the Athletics annual fund (100% charitable).  After receiving their tax receipts, fans called the Athletics department and said that they meant to secure seats for various athletic programs, and not make charitable gifts.  The Athletics department emails us and asks us to adjust these gifts in our system from a charitable account to a non-charitable account despite receipts having gone out already. I've explained multiple times that doing this would make us complicit in facilitating IRS fraud for the "donors" since we've given them a receipt and then subsequently provided them with an impermissable benefit.  Our Athletics department doesn't seem to care and just wants to do what's easiest for them.

My understanding of best practice has been that we should first reach out to these fans and ask them to return their original paper receipts before making the adjustment in our system.  Here's the problem.  The Athletics department consistently pushes back on this saying, "...can we send them a second letter informing them that the receipt is incorrect and cannot be used on their federal tax returns? [We] feel like that would absolve the foundation if the IRS were ever to come to us on something like this. It seems unrealistic to demand someone return a receipt because we really don't have any authority if they choose not to return the receipt and in reality they could just make a copy and use it anyway."

Now, we have done this in the past BUT it's a lot of work because WE have to draft a letter explaining and instructing the donor as to what is going on and why they're getting a second (acknowledgement) letter (each case is slightly different), and we have to send these USPS certified/return receipt to ensure they've gotten them.  We've done it when the number was low, but now we have about a dozen of these and feel the burden is unreasonable.

Has anyone dealt with this and had success in counterarguing their point to their Athletics department?  Thanks!

Original Message:
Sent: 4/18/2023 2:02:00 PM
From: Isaac Shalev
Subject: RE: Problems with Athletics

Original Message:
Sent: 4/18/2023 11:28:00 AM
From: Eric Valdescaro
Subject: Problems with Athletics

For those familiar with aggressive athletics programs, I would love your feedback and advice!

Our Athletics program recently sent out its calendar 2023 annual solicitation to its donor and fanbase.  Due to the way the solicitation was written, several fans wrote checks back and/or donated online contributing to the Athletics annual fund (100% charitable).  After receiving their tax receipts, fans called the Athletics department and said that they meant to secure seats for various athletic programs, and not make charitable gifts.  The Athletics department emails us and asks us to adjust these gifts in our system from a charitable account to a non-charitable account despite receipts having gone out already. I've explained multiple times that doing this would make us complicit in facilitating IRS fraud for the "donors" since we've given them a receipt and then subsequently provided them with an impermissable benefit.  Our Athletics department doesn't seem to care and just wants to do what's easiest for them.

My understanding of best practice has been that we should first reach out to these fans and ask them to return their original paper receipts before making the adjustment in our system.  Here's the problem.  The Athletics department consistently pushes back on this saying, "...can we send them a second letter informing them that the receipt is incorrect and cannot be used on their federal tax returns? [We] feel like that would absolve the foundation if the IRS were ever to come to us on something like this. It seems unrealistic to demand someone return a receipt because we really don't have any authority if they choose not to return the receipt and in reality they could just make a copy and use it anyway."

Now, we have done this in the past BUT it's a lot of work because WE have to draft a letter explaining and instructing the donor as to what is going on and why they're getting a second (acknowledgement) letter (each case is slightly different), and we have to send these USPS certified/return receipt to ensure they've gotten them.  We've done it when the number was low, but now we have about a dozen of these and feel the burden is unreasonable.

Has anyone dealt with this and had success in counterarguing their point to their Athletics department?  Thanks!

------------------------------
Eric Valdescaro
University of Memphis
eric.valdescaro@memphis.edu
------------------------------

Thanks Isaac and John.  @John Taylor - we are very familiar with the 1099-Misc requirement since we just experienced this situation with, yes, you guessed it, another Athletics donor.  The difference this time was that our Controller (at my insistence that a 1099 was necessary) checked with their tax advisors and they agreed. 😁 (This was for a prior year gift over $600 that the Athletics donor wanted to switch form charitable to charitable).  @Isaac Shalev  - Disclaimers understood.  To be clear, these weren't misclassifications and receipting mistakes.  They were recorded and receipted properly.  The "donors" made the mistake and we're trying to avoid enabling a scenario for them to exploit. I don't think a call to our tax advisor is necessary here.  This is not a question of Treasury reg compliance on our part so much as it is a question exhibiting prudent behavior on behalf of optics.  IOW, we shouldn't become known as the school where you can game the system to get your athletic seats AND your tax refund by calling afterwards and saying "Oops, I meant for that to be towards my seats."  Yes, the onus is on the donor, but we should also make a good faith effort not to be complicit if reasonably possible.

For those familiar with aggressive athletics programs, I would love your feedback and advice!

Our Athletics program recently sent out its calendar 2023 annual solicitation to its donor and fanbase.  Due to the way the solicitation was written, several fans wrote checks back and/or donated online contributing to the Athletics annual fund (100% charitable).  After receiving their tax receipts, fans called the Athletics department and said that they meant to secure seats for various athletic programs, and not make charitable gifts.  The Athletics department emails us and asks us to adjust these gifts in our system from a charitable account to a non-charitable account despite receipts having gone out already. I've explained multiple times that doing this would make us complicit in facilitating IRS fraud for the "donors" since we've given them a receipt and then subsequently provided them with an impermissable benefit.  Our Athletics department doesn't seem to care and just wants to do what's easiest for them.

My understanding of best practice has been that we should first reach out to these fans and ask them to return their original paper receipts before making the adjustment in our system.  Here's the problem.  The Athletics department consistently pushes back on this saying, "...can we send them a second letter informing them that the receipt is incorrect and cannot be used on their federal tax returns? [We] feel like that would absolve the foundation if the IRS were ever to come to us on something like this. It seems unrealistic to demand someone return a receipt because we really don't have any authority if they choose not to return the receipt and in reality they could just make a copy and use it anyway."

Now, we have done this in the past BUT it's a lot of work because WE have to draft a letter explaining and instructing the donor as to what is going on and why they're getting a second (acknowledgement) letter (each case is slightly different), and we have to send these USPS certified/return receipt to ensure they've gotten them.  We've done it when the number was low, but now we have about a dozen of these and feel the burden is unreasonable.

Has anyone dealt with this and had success in counterarguing their point to their Athletics department?  Thanks!