Rylander, Clay and Opitz, LLP, a leader in not-for-profit tax, assurance, and advisory services is hosting an informative “Lunch ‘n Learn” seminar for non-profit accounting personnel. The topic of the panel discussion is “Accounting for Special Events” and will focus on various accounting issues related to raffles, auctions, sponsorships, internal controls surrounding cash collected at events, sales tax implications and other IRS reporting requirements related to special events. The seminar will be held on October 4th with registration beginning at 11:45 am. The program will start at noon and conclude at 1pm. It will be held at Easter Seals North Texas located at 1424 Hemphill St., Fort Worth. Please RSVP by September 29th by logging on to www.rcosolutions.com. The cost is $15 per person and includes lunch. For more information, please call 817-332-2301.

Special events are an effective way for a non-profit to both raise money and also raise awareness of the organization and its mission in the community. Special events that are well planned and consistent year to year are often very successful. An important aspect, however, is the tax deductibility of purchases or contributions made by the attendees. Often the organization and the attendees incorrectly assume that all purchases of tickets, tables, registrations, auction items, etc., are 100% tax deductible. 

The IRS clearly states that, “If a donor received something of value in return for the contribution, a common occurrence with fund-raising efforts, part or all of the contribution may not be deductible.” 

So what is deductible? The amount that is deductible is actually the amount given over and above the fair market value of the event or purchase. This is where the organization should step in and give some assistance to the attendees.  Read the rest of this entry »

Is your tax exempt organization planning an inventive, special event or a fundraising game? Texas lawmakers take a strict view on gambling/gaming laws, which can affect your organization. Consider the following when planning your special event:

• Is there a game of chance?
• Does the game involve cards, dice, or other gambling devices?
• Are the chances of winning equal for all players excluding the effects of skill?

There are certain common events that have been ruled against or could possibly constitute illegal gambling. These include:

• An entry fee to participate in a game of chance.
• A rubber duck race requiring an entry fee.
• A poker run where individuals pay for cards to see who gets the best hand to win a prize.
• Many more possible….

If your organization is still considering certain gaming activities, there are steps you can take to make the event fun and legal. Consider these options:

• No fee to enter or play, with the exception of a food charge (then we recommend you solicit a contribution for the food.)
• Each participant that comes must be in consideration for the prize offered.
• Charge an entry fee but award no prizes for winning or the prizes could be offered as door prizes with everyone having the possibility of winning (This will generally not substitute for casino nights, but may work with other games.) 

For annual gaming revenue that exceed $15,000 the new redesigned Form 990 requires additional disclosure of the event. Remember, this tax form is public record and assessable by state and local taxing authorities.

Illegal gaming for the participant is a Class C Misdemeanor. The host may be charged with a Class A Misdemeanor and face higher fines and possibility of jail time.

For more information on gaming and ramifications see Chapter 47 of the Texas Penal Code.