One for Mike Malody please!

[joanmcq]

I have a new client who is an abbot/ordinary and gave me a letter from his superior stating he has taken a vow of poverty and donates a minimum of his post-tax income to his community. His income is primarily from social security and a small pension. I am under the impression that his former preparer took a charitable contribution, but I do not have a receipt or letter stating an amount. I am not sure what is or could be customary under these circumstances, and feel he should still have a reciept for the amounts donated. He stated he also gave amounts directly tp a brother (friar-brother, not familial) in the Phillipines towards education, but I am thinking that this is a gift, and not a donation since it is directly to a particular person. Am I correct in this? This client was a last minute pick up/extension on April 15 and I didn't get much time to interview him.

[jainen]

>>he should still have a reciept for the amounts donated<<

Even holy men are subject to the normal substantiation rules for charitable contributions. Everything must have written documentation, and donations of more than $250 require acknowledgment of the amount and the value of any support or other services provided in exchange.

I don't know much about vows of poverty (my own poverty comes from a vow of marriage instead), but I think it strange that he only has to turn over a "minimum" of his income and can use the rest for personal preferences.

[MAMalody]

I have a new client who is an abbot/ordinary and gave me a letter from his superior stating he has taken a vow of poverty and donates a minimum of his post-tax income to his community. His income is primarily from social security and a small pension. I am under the impression that his former preparer took a charitable contribution, but I do not have a receipt or letter stating an amount. I am not sure what is or could be customary under these circumstances, and feel he should still have a reciept for the amounts donated. He stated he also gave amounts directly tp a brother (friar-brother, not familial) in the Phillipines towards education, but I am thinking that this is a gift, and not a donation since it is directly to a particular person. Am I correct in this? This client was a last minute pick up/extension on April 15 and I didn't get much time to interview him.

I'm not sure about this "vow of poverty" you are talking about. Members of religious orders who have taken a vow of poverty are exempt from paying SE tax on earnings for qualified services. In this definition, earnings are considered the income of the religious order. I don't see this as your situation and would agree with your suppostion and Jainen's comments that the regular contribution verification rules would be in play here. You observation about the individual directed giving would also be correct, based upon the facts presented here. I hope this helps.

Mike

[Julie]

Couple of thoughts...

Some of the facts presented are unclear.

What exactly is the "minimum" the client is required to give to his order? Is he merely permitted to keep a small amount to live on, while the order gets the rest? Or is it the other way around?

Whose education? Is the "brother" using it to educate others, or is it for his own education?

I'm no expert in the field, but it seems like those questions might be germane.

I'm not sure about this "vow of poverty" you are talking about. Members of religious orders who have taken a vow of poverty are exempt from paying SE tax on earnings for qualified services. In this definition, earnings are considered the income of the religious order. I don't see this as your situation and would agree with your suppostion and Jainen's comments that the regular contribution verification rules would be in play here. You observation about the individual directed giving would also be correct, based upon the facts presented here. I hope this helps.

Mike

[joanmcq]

Education is for the brother in the field. I'm not sure about the whole 'vow of poverty' thing, because he is giving to the church, not being paid by the church. Odd situation. and, like I said, it was a panicked april 15th extension (he wasn't happy with his preparer who had had his papers for a few months) so called me. If I don't like it, I'll send him on. Too busy for late april as it is. (the extensions are coming home to roost, or at least calling to see if their returns are done)