USA Donating Accounting Services to Qualified Charity

[Shogun1011]

Hi Everyone,

I just recently started working with my first qualified public charity and want to donate my accounting services to help them out. They're a relatively new charity and don't have a lot of revenue coming in to pay for my services, so I figured I'd be generous as long as I could deductible the contribution on my end.

Details on the Services performed:
So far, I've migrated their books to a new accounting software, handled all the bookkeeping for the first two months of 2016, generated financials and answered accounting related questions when asked. Going forward, I plan to continue performing all accounting/bookkeeping functions on a monthly basis. The rate I'm charging them (or donating) is clearly posted on my website as a standard monthly bookkeeping rate applicable to all new clients, and not some fictitious inflated figure pulled out of thin air.

I know my services are professional & specialized, but I unfortunately am not a CPA (I have an accounting degree from Bentley University, worked for 11yrs as a controller for a privately held corporation (which is why I never pursued my CPA), and have just recently gone out on my own starting my accounting business in November 2015).

My Question to the community is;
- Do I actually need the CPA title in order for the IRS to recognize my services as a qualified contribution? I've read that having this title helps, but have heard others say that it's actually mandatory.

I have tried calling every IRS support number that I can find, and keep hitting dead ends (probably due to the time of year I suppose). Thanks for any help you can give on this topic.

Sincerely,
Shamus

 

[kirby]

IRS Publication 526 Charitable Contributions Page 7- says that the value of your donated services is a "Contribution You Cannot Deduct."
Sorry.

 

[Shogun1011]

I feel that we're missing something here. This was pulled from the Greater Washington Society Of CPA's (the bulk of the content I believe was actually pulled directly from the IRS website). What I read from this is that if I'm an accountant donating my specialized skills, they qualify as being recognized as contributed services (bullet number 2 below), and that the chartable organization should account for these at fair market value (last paragraph). Doesn't that mean I should be able to use fair market value to deduct these contributions on my end?


"Donated services can cover a variety of non-material assistance such as:

• providing legal, accounting, and other professional services
• donating office space
• donating free use of equipment such as computers

To be recognized, the contributed services must:

1. create or enhance nonfinancial assets (e.g., constructing a building), or
2. require specialized skills, are provided by individuals possessing those skills (e.g., carpenters, doctors, and accountants) and would typically need to be purchased if not provided by donation.

In addition, if an affiliated organization is providing donated services (such as accounting, information technology and administrative services) that meet the above criteria, these services would also need to be recognized as contributions.

Note Disclosures

Financial statements should include disclosures in the notes about both donated goods and services.

For gifts-in-kind, the notes could identify the type of donor (government, for profit entity, nonprofit organizations, and/or individual), the nature of goods received, the fair value for each and valuation method used. A separate note or paragraph could identify how these goods were used (directly by the organization or in partnership with other organizations.) In most cases, gifts-in-kind are used solely for program service activities but if items are used for fund raising and/or management and general purposes, this should be identified.

For contributed services, the notes could identify the nature of the services received, their fair value, and how they were used (the amount allocated to program services, management and general and fund raising expense categories.)"

** Here's a link to another site mentioning similar info: http://www.notforprofitaccounting.net/2008/12/10/contributed-services/

What am I missing here?

Thanks,
Shamus

 

[kirby]

Hi
What you are missing is that the info you cite above is for the CHARITY not for you, the donor. The charity has to report donated goods and services and that is what the above is about.

 

[ladyrider]

Exactly - SERVICES are not deductible, You can deduct any office supplies you might have to get for this specific project, stamps you use, mileage for going to and from the client if you do but NEVER your hourly rate.