Charity Fraud Is Becoming Increasingly Common
If you like to be generous when it comes to charities, bless your heart. It takes a special person to give to those who need it most. However, there are a number of unscrupulous trolls who would take advantage of such people. If you want to avoid charity fraud, here are some things you need to look out for.
Is It Really Tax Deductible?
One good way to see if a charity is legit is by checking whether or not donations to them are really tax deductible. If a charity is legitimate, they usually have 501(c)3 status awarded to them by the IRS. However, you can’t just assume a charity has 501(c)3 status just because they say they do. Many of the creeps committing charity fraud will say they have tax exempt status even if they don’t.
To see if a charity has been awarded this status and if donations to them really are tax deductible, visit the IRS’s website.
Brand new charities may be undergoing the 501(c)3 application process and may not be listed on the IRS’s website. You may actually have to call the IRS to verify a charity’s legitimacy or ask to see the charity’s articles of incorporation. If a charity doesn’t have articles of incorporation, there is no way they have applied for tax exempt status since articles of incorporation are necessary to do so.
When counting on a tax deduction from the donations you make, please remember that your total deductions cannot account for more than half of your adjusted gross income.
Make Payments Directly To The Charity
Another common charity fraud scam occurs when someone collects money “on behalf” of a legitimate charity. When you make a donation to a charity, make it to the charity directly and make sure you make the check out to the charity’s proper name. If you make a donation any other way, you can’t be sure where your money is going.