Tax question for theme camps...

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Tax question for theme camps...

Postby tSmalls » Wed Apr 17, 2013 8:53 pm

So this may be a random question as only some tax gurus will know the answer. But I figured there's gotta be one floating out there on ePlaya somewhere. Sooooo as a camp, we have 50% of our people traveling long distance from Canada. As such, our side of the camp has been tasked with building the infrastructure and interactive pieces for the camp. We've all decided to pool our financial resources together so that we can create/bring some really rad stuff this year! So my question is this------> Since I'm going to be collecting funds for this contribution from all my camp mates, does that mean I'm going to get slammed by the IRS if I don't claim said contribution as part of my personal income? We were going to open a separate bank account just to manage camp funds, so nothing would be going into my personal account. Please advise... Thanks ALL!
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Re: Tax question for theme camps...

Postby Savannah » Wed Apr 17, 2013 9:04 pm

I tried "does a social club with a treasury pay taxes?" in Google. Got these (among others). First see if your group meets the definition of a social club, or if there's something more apt.

http://www.irs.gov/Charities-&-Non-Prof ... cial-Clubs

http://www.irs.gov/irm/part7/irm_07-025-007.html

You could try emailing the IRS as well, if you're not sure. You've not done anything yet.
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Re: Tax question for theme camps...

Postby tSmalls » Wed Apr 17, 2013 10:05 pm

That looks like an excellent lead! Thanks, Savannah! You're aaaaamazin!
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Re: Tax question for theme camps...

Postby Sham » Thu Apr 18, 2013 1:25 am

It appears that your camp is just a matter of collecting money for a group party with a bunch of friends. You could open a non interest bearing checking account, so there is no money being generated by the account.

Honestly, I have never even heard of having to report to the IRS about a bunch of friends planning a vacation in the desert.

I'm not a tax adviser, but you may not want to open up any can of worms where it never existed before, but I'm sure if you ask the question, you will be sent a 50 page form to fill out.

Just my personal thoughts......

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Re: Tax question for theme camps...

Postby ConnieH » Thu Apr 18, 2013 10:44 am

My unprofessional 2 cents: if you spend all the money you take in, you have no taxable income from your venture - you aren't "earning" money, you are collecting a pool of money to be spent. Keep records just in case. If there is money leftover in the account at year end, however, you may need to report that balance as income, and most definitely any interest earned on the account.

So spend all the money and don't worry about it :)
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Re: Tax question for theme camps...

Postby dragonpilot » Mon Apr 22, 2013 4:09 pm

I am a tax professional...ten years with a large nation-wide tax prep company. No...it's not income and as such not reportable as income as far as the IRS is concerned.

However, if you abscond with said funds to, say, Brazil, your campmates will hunt you down and you'll suffer a fate worse than anything the IRS could do to you.
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Re: Tax question for theme camps...

Postby trilobyte » Mon Apr 22, 2013 4:56 pm

I'm giving this a nudge over to Shelter & Camping, since the preparation board is a better fit for general questions about preparation and organization.

There are already a number of excellent answers posted in the thread. I'll echo what others have said, so long as there's no net income my understanding is that it does not need to be reported. With our camp, my girlfriend manages the financials and while she does maintain records it's more for planning/budgeting purposes and not used for taxes. Of course, some camps incorporate or get themselves set up as a non-profit for one reason or another - in those cases, there would be accounting and reporting obligations that go with that but I have no idea what they would be.
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Re: Tax question for theme camps...

Postby MyDearFriend » Tue Apr 23, 2013 3:55 pm

If you are collecting more $$$ from your friends than you are spending on your camp, then, GTFO.

Seriously.

If you are a Burner, then, spend that $$$ and come on! 8) 8) 8)
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Re: Tax question for theme camps...

Postby BBadger » Tue Apr 23, 2013 7:47 pm

As there is no income, you shouldn't be taxed. However...

Keep good documentation just in case the IRS does perform an audit.

Never use Paypal to transfer funds. I think they charge a fee for "gift" transactions now, and they love shutting down accounts whenever they think there is suspicious activity (lots of "gift" transactions is a red flag).
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Re: Tax question for theme camps...

Postby trilobyte » Thu Apr 25, 2013 5:15 am

Paypal did change the way their fee structure works (it's posted here), but it should be free for those using their account balance or linked bank account (at least for US domestic xfers). Even under their old guidelines, if you were seeing enough camp dues gift payments that they shut down your account, you were probably a big enough operation that you should be working with an accountant and have separate accounts set up. While I'm not endorsing them over all other services, it's worked well for our camp's needs for the last few years.
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Re: Tax question for theme camps...

Postby BeachBum » Fri Apr 26, 2013 2:27 pm

tSmalls,

I was wondering about the same question, just from a personal edification point of view. I only spent one season working taxes in a strip mall, but i like dragonpilot's much more learned response. Just keep records in a folder in case there are any questions, and list the buck or two of interest earned on your own Sch. B if you need to submit this schedule.

People get scared of a letter from the IRS, when there isn't a need to be in most instances. Though there are times to be scared, such as intentionally hiding for-profit-business income or not pulling required distributions out after 70 and 1/2, among others. The tax filing system, as implemented, is a massive collection of errors (just ask dragonpilot about errors his coworkers have made ;-) The IRS just sends letters out per their rules to try to get more revenue. Should a letter be received, send a letter back to them with dragonpilot's response, checking the letter with someone first though. The only really, really wrong thing you could do is to ignore their letter and hope it goes away, it won't.

If the IRS, or some bozo state tax authority, for some unbeknownst reason, says no go on that, i like Savannah's response as to "Social Club". I totally forgot about that in our training, it was only one quick mention, but it's a beautiful solution. Better than having to declare your camp as a "hobby", i.e., a business that doesn't make money, and having to pay taxes on like the first 2% of your AGI before you can deduct camp expenses, probably resulting a few hundred in unnecessary extra taxes to be paid.

Big camps usually include or know someone who's an accountant, so they can handle their own stuff easily.

As usual, with any question about or issue that involves anything relating to laws or so forth on eplaya, please ignore any guesses at what the correct answer may be, including my guess here. Most of these guesses are usually totally clueless and incredibly wrong, reflecting the respondent's preconceived confirmation biases.

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Re: Tax question for theme camps...

Postby pink » Thu May 09, 2013 6:42 pm

I'm a CPA with a master's in tax and my own tax practice. The answers you've gotten above are spot on. Gifts are not taxable income, nor is the pooling of resources. Now that said...IF you are the person who's social security number is used to set up the account/name is on the account, and IF you are audited in a full scale audit that includes a bank account analysis for unreported income, you will have to prove where the deposits came from and why they are not income. So you might want it to be a joint account with at least one other campmate, and do keep good records of what's coming in & going out. You'd want to do this anyways, just in case one of your campers ends up being like that one dickwad last year that kept whining about wanting to see his PnP camps financials.
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Re: Tax question for theme camps...

Postby theCryptofishist » Thu May 09, 2013 9:15 pm

pink wrote:I... just in case one of your campers ends up being like that one dickwad last year that kept whining about wanting to see his PnP camps financials.

Oh god, I'd forgotten that... What a dick.
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Re: Tax question for theme camps...

Postby BeachBum » Fri May 10, 2013 12:26 am

pink,

Thank you for the very informed response. Just curious, I assume "pooling of resources is not reportable income" is cool until the camp gets so big that it builds up a significant year-to-year treasury, or really gets into some big expenditures? It seems like the vast majority of camps don't need to go any further than this, and the ones that are big enough to need a different setup would probably have someone sufficiently knowledgeable to set them up anyhow.

An aside, you've probably heard this Aerosmith tune a number of times, good band :-)
http://www.youtube.com/watch?v=RLRLhV9U0kQ

Thanks again.
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