The N-SSA is a 501 (c) (3) tax exempt organization.
National Commander's Comments
As in the 1930's and 40 s, it's time for a "Fireside Chat" here in mid-winter pre-skirmish season. By now everyone is aware that we have been approved as a 501 (c) (3) tax exempt organization. However, there are many questions regarding what it will do for us and what we are allowed to do—tax-wise. I asked our Judge Advocate and his tax-attorney associates to prepare a concise outline of the do's and don'ts so that we won't have ten different stories running around the Association. Following is that outline:
Section 501 (c) (3) Status:
Effective as of August 11, 1998 the IRS has determined that the N-SSA is a tax exempt organization as a corporation organized for "educational purposes". As such, the N-SSA is entitled to accept "Charitable Contributions" which may be deducted from the donor's Federal Income Tax.
It should be kept in mind that the primary purpose of applying for the 501 (c) (3) status was to make it advantageous for individuals to contribute money and property to the N-SSA which would provide new sources of revenue and perhaps regional ranges. It would not, however, be a vehicle to provide tax breaks for members' normal skirmishing expenditures.
Set forth below are some general guidelines to assist N-SSA members and answers to some commonly asked questions. This is not intended as legal advice as to how individuals should file their tax returns and individuals with tax questions are cautioned to seek professional advice from their own attorney or accountant.
1. Cash contributions to the N-SSA are deductible.
Contributions of cash to the N-SSA are deductible. Such contributions in any amount should be clearly marked as "contributions" or "donations" and sent to the Commander, Paymaster or Executive Secretary. Donations of more than $250 require a written receipt from the N-SSA that will be provided.
There is no automatic restriction on how such contributions may be spent by the N-SSA, other than it must be consistent with the N-SSA By-Laws. If donors desire to recommend a specific purpose for which the funds should be used they may do so in writing and the N-SSA will comply with the request to the extent practicable.
2. Contributions of Property to the N-SSA are deductible.
If property, such as land, vehicle or a firearm or book collection, is donated to the N-SSA the amount which may be deducted from Federal income taxes is generally the fair market value of the property at the time of the donation.
Such a contribution must be the individual's entire right or interest in the property. Thus a donation of the right to use property is generally not deductible.
The N-SSA will provide a receipt with a detailed description of the property (furnished by the donor and confirmed by the N-SSA). It is noted that the IRS requires additional information for deductions of property valued at more than $500. The additional information includes the date the donor originally acquired the property, how it was acquired, and the cost of the donated property.
The IRS requires a written appraisal from a qualified appraiser for donated property valued at more than $5,000. Determination as to the fair market value of property contributed to the N-SSA and obtaining qualified appraisals, if required, is the responsibility of the donor, not the NSSA. It is noted that appraisal fees may also be deductible, subject to certain limitations. The N-SSA intends to invite individuals who believe they are qualified to provide appraisals of Civil War collections to submit resumes that, for convenience only, will be made available to others interested in making such contributions.
At the present time it is the intent of the N-SSA to sell all property contributed (other than land which may be used for skirmishes) that cannot be readily used for N-SSA activities, or safely stored or displayed without additional expense to the N-SSA.
3. Expenses customarily incurred to be a member of the N-SSA and to participate in skirmishes are not deductible.
As a general rule it is suggested that all expenses customarily incurred by individuals to be members in good standing of the N-SSA and participate in skirmishes should not be deducted as charitable contributions.
Members have been incurring such expenses as the cost of firearms, powder, uniforms, travel, N-SSA and team dues, skirmish fees, etc., during almost 50 years for personal enjoyment. Thus there is a substantial record that N-SSA members incur such expenses for their personal pleasure and recreation. Moreover, members receive tangible benefits in exchange for such expenditures such as use of all N-SSA facilities, participation in N-SSA activities, receipt of the Skirmish Line, etc. Therefore it is recommended that members do not attempt to deduct such customary skirmishing expenses from their Federal income tax.
4. Value of time or services donated are not deductible.
As a general rule, members cannot deduct the value of their time or services donated to the N-SSA. Thus participation in work skirmishes, time devoted to N-SSA work as an officer or committee member or any other voluntary service to the N-SSA is not a deductible contribution, even if a member would normally be paid for such services.
5. Donations as part of fund raising events are not deductible.
Generally, purchases of raffle tickets, or tickets to events such as dances, etc., are not deductible. Purchases of N-SSA merchandise are not deductible.
6. Out-of-pocket expenses for services provided are deductible.
Generally, the out-of-pocket costs incurred in providing volunteer services to the N-SSA is deductible. Thus, if a member donated the use of a piece of construction equipment for a work skirmish, the cost of fuel consumed in transportation to and from Ft. Shenandoah and during the work skirmish would be deductible, but not the rental value of the equipment. Travel expenses to Board meetings or work skirmishes, but not skirmishes could be deductible.
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Hopefully the above compilation of guidelines boiled down from many, many pages of documents will be helpful to all of us. One of the key points is that "if you have questions regarding your specific circumstance, contact your attorney, accountant or tax consultant".
There have also been questions regarding our ability to "express our opinions" etc. Nothing has really changed with the new tax status. As individuals each of us can still give advice and make our opinions known through whatever mediums we have available. The Association, on the other hand, as has always been stipulated in our By-Laws, shall not "carry on propaganda or otherwise attempt to influence legislation and shall not participate in, or intervene in or campaign on behalf of any candidate for public office". (Paraphrased)
This changed "status" opens great new possibilities for us. In the years to come we'll be able to use donations to expand our regional skirmishing presence as well as for Ft. Shenandoah improvements. We'll be able to enjoy the fruits of these donated improvements while fulfilling our role of expanding the knowledge and awareness of Civil War history. My thanks to each of you for your assistance, vision and perseverance during the long process of obtaining the ruling.