Change the Tax Code to Allow Deductions for Pro Bono Services
Red Rooster Group is establishing a campaign called Deduct It! to change the IRS tax code to allow small businesses to claim a deduction for services they donate to registered 501(c)3 nonprofit organizations. We have created a blog to gain support for this issue: http://deductit.wordpress.com
Goods that are donated are allowed to be deducted, but not services. Allowing this deduction will:
- Correct the fundamental discrimination against service businesses.
- Create massive value for the nonprofit sector at a time when it needs it badly.
- Encourage a culture of businesses contributing to the service sector.
This is the start of a nationwide movement to form a coalition to change this code. We appeal to all small business owners and associations:
- Creative service firms (Design, advertising, public relations)
- Consulting Firms (business, operations, marketing, strategic planning, fundraising, etc.)
- Architecture & Design Firms
- Law Firms
- Accounting and Financial Firms
We are in the process of galvanizing national grassroots support from both business and the nonprofit sector, drafting the legislation, and soliciting political support and sponsorship.
This blog will explore the considerations relating to this issues including:
- What types of businesses or services the deduction will apply to (for example, for small businesses up to $500,000 in revenue, and incorporated business, as opposed to individuals volunteering their time as a volunteer)
- The amount of deductions allowed and whether a cap is needed (most likely based on a percentage of gross sales).
- The value of the service being claimed (perhaps based on a previous service offered).
Join us in our push for this legislative change. We welcome your comments and feedback. More info at: http://deductit.wordpress.com
Howard Levy
Hi Howard,
I’m in total agreement, I feel very strongly that we in service industries have been undervalued for our pro bono efforts. Why do the electricians who help wire the building or the plumbers who give their time get to write off their services when as a design firm we give countless hours to help the same non profit without any tax benefits at all. You go, and good luck in your efforts. Need me to sign something just let me know.
Great conversations last night!
Ann,
Thanks for your comment and your suggestions last night. I created a new blog to address this issue: http://deductit.wordpress.com
Do you mind reposting your comment there as well. Thanks.
Howard
I’ve been included in taxations for longer then I care to admit, both on the personal side (all my working life story!!) and from a legal point of view since passing the bar and following up on tax law. I’ve rendered a lot of advice and corrected a lot of wrongs, and I must say that what you’ve posted makes perfect sense. Please persist in the good work – the more individuals know the better they’ll be equipped to deal with the tax man, and that’s what it’s all about.