Sunday, June 12, 2016

Honestly writing off book donations


Every year, H.F. donates books to her local library for its annual library book sale run by a nonprofit group set up to provide funds for library purchases. H.F. figures it's a great way for her to clear her shelves for more books and also to donate to an organization whose efforts she supports.

When H.F. brought her boxes of books to the library in the past, there were no volunteers around, so she simply left the books near the door marked "book donations" in the library's basement.

But on her most recent book drop-off, the door to the room was open and a couple of volunteers were busily sorting books. H.F. poked her head in the door and asked if she should bring the boxes of books into the room.

"Sure," one of the volunteers told her. "You can just set them on the table for us to sort through."

As H.F. was leaving the last of her boxes on the table, the volunteer asked her if she needed a receipt for her book donation. (The Internal Revenue Service (IRS) permits donors to deduct from the taxes they owe a fair market price for each book donated to a nonprofit.) "OK," H.F. responded, and then asked the volunteer if she needed to count the number of books she donated so it could be added to the receipt. H.F. also mentioned that she had dropped off books in the past for which she never got a receipt.

Typically, organizations will guide donors on how much they can deduct for each item given. But the volunteer told H.F. not to worry about counting the books. She then took out three pre-printed donation forms, dated one with the current date, and then dated each of the others for two prior dates a few months earlier in the year.

She instructed H.F. that generally she could deduct $2 for each hardback donated and $1 for each paperback. "Just don't say it was more than $200 worth of books at any one time. The IRS might question that." She left it to H.F. to estimate how many books she had donated to the library, both this time and on previous visits that year.

"I don't have a clue how many books I've donated on past visits," H.F. writes, "let alone how many were hardbacks or paperbacks." She wants to know if it was wrong for the volunteer to advise her to estimate using the $200 cap on each form the volunteer recommended.

Yes, it was wrong. The volunteer was not only advising H.F. to be unethical by fudging the amount she donated, she was also advising her to lie to the IRS. Lying to the IRS is illegal and inadvisable.

H.F. isn't required to take any deduction for the books she donates to the library book sale. If she does, however, the right thing is to keep an accurate count of how many books she does donate and then to take only the deduction for which she is entitled. And the library support group would be wise to do the right thing and do a better job of training its volunteers on how to instructor donors to accurately account for their donations. 

Jeffrey L. Seglin, author of The Simple Art of Business Etiquette: How to Rise to the Top by Playing Nice, is a lecturer in public policy and director of the communications program at Harvard's Kennedy School. He is also the administrator of www.jeffreyseglin.com, a blog focused on ethical issues. 

Do you have ethical questions that you need answered? Send them to rightthing@comcast.net. 

Follow him on Twitter: @jseglin 

(c) 2015 JEFFREY L. SEGLIN. DISTRIBUTED BY TRIBUNE CONTENT AGENCY, LLC.


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