Is Your Occupy Wall Street Donation Tax Deductible? Does It matter?

OWS isn't an official charity.

BySchuyler Velasco, Correspondent, The Christian Science Monitor
October 27, 2011, 4:57 PM

Oct. 29, 2011— -- Donations are pouring in to local Occupy websites across the country and around the world. Want to contribute to the protest movement in your city? It's perfectly legal, as long as you don't mark it as a deduction on your taxes.

As the Occupy Wall Street protests in Manhattan's Zuccotti Park roll through their second month, online donations for things like food, shelter, computer support, and the OWS print newspaper fund are hovering right around $500,000. In Boston, where protesters have been occupying Dewey Square for the past month, donations are currently at $24,980 and rising.

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"Right now our biggest priority is winterization, so some donations will go toward snow removal, and different options that we are looking into for shelter," says Eric Martin, a member of Occupy Boston's financial accountability working group. "We want to make sure that everyone is warm, comfortable, and safe."

Despite the money they're pulling in, the Occupy movements are not registered as tax-exempt nonprofits or charities. According to Jeffrey Levine, a certified public accountant and member of the Massachusetts Society of Certified Public Aaccountants, this isn't really a problem. A gift to the Occupy movement is your prerogative; just don't mark it on your tax return.

"Donors aren't running any risk as long as they don't mark it as a charitable deduction. [Occupy Boston] could at some point obtain nonprofit tax-exempt status, but it probably won't be recognized as a charity," he says.

What's the difference between a nonprofit and a charity? Nonprofits (Mr. Levine cited the example of the Massachusetts Chamber of Commerce) don't turn a profit and are thereby exempt from taxation. But according to tax law, only contributions to organizations that qualify as charities are allowable tax deductions. Charities must serve the general public interest, and there are nine types under the federal tax code. According to the official language, charities are organizations that:

1. Relieve the poor, the distressed, or the underprivileged2. Advance religion3. Advance education or science4. Erect or maintain public buildings, monuments, or works5. Lessen the burdens of government,6. Lessen neighborhood tensions7. Work to eliminate prejudice and discrimination8. Defend human and civil rights secured by law9. Combat community deterioration and juvenile delinquency

Other organizations that qualify are those which test for public safety, foster national or international amateur sports competitions, and prevent cruelty to children or animals.

"Occupy Boston probably has not made any application to be tax exempt, but they probably should, eventually," says Levine. "They sound more like a PAC [political action committee] than a charity, to me. I'm all for the movement, but I don't see how they could ever qualify as tax deductible."

"We're working on the organizational structure," says Mr. Martin. "We want to be within the law, so we are working with lawyers to come to a decision on registering."

Paul Fierman, a retired airline pilot living in Woodstock, GA, donated to the movement through the Occupy Wall Street website, and he sees the tax deduction issue as unimportant.

"It doesn't bother me in the least," he says. "The longer people are out there spreading their message, the more likely it is to stick. That's why I donated. If they have to go home, this thing is going to die. I'll keep donating as long as they're out there."

Mr. Fireman cites the widening income gap as his reason for donation. "These CEOs are making more in one day than their workers make all year, and that just shouldn't be, he says. "There has got to be a change of attitude in this country."

"I think the protesters have bigger fish to fry than whether they are doing taxes right or not, " Levine added.

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