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06/03/11(Fri)00:03 No.4545518>>4545408
Just
chiming in after asking my accountant friend about this, who is also an
enrolled agent, which is someone who works directly on behalf of
taxpayers when they speak with the IRS. Nothing states that you have to
be shown receipts for donating to a project like this. The fact that
they have posted actual finished photos is enough to satisfy the
question of whether or not they produced something with the money
brought in.
On the tax evasion issue, he said the chances it
would be looked into are remote, and the only thing that would happen
from that is they would be asked to show receipts to the IRS via an
audit. Even not having receipts for everything, there is enough
documented evidence of their expenses via video that it would be easy to
prove that actual money was spent on the production of the photos.
Failure
to report a profit and pay the taxes on that profit would be tax
evasion (i.e. evading the tax on the actual profit). He said that since
they are also putting in their own money, it would be very easy to show
that they spent more on the project than the funds they took in, and
that all of the expenses, including most of the meals, would be tax
deductible. Their project would be easy to show as operating as a loss,
not a profit.
So in this case, if they were called in on account
of taking donations for the project, the end result is that they'd walk
out of the audit with a tax deduction, which is the exact opposite
effect and a major reason the IRS would just ignore the case from the
start. |
