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Nonprofit Law/Mandatory Donation vs. Tuition

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Question
My son was attending a 501c3 school just for children with autism, which had requested us to donate funds monthly.  It was advised to us that they had no tuition, but that they requested the donations to keep the school running as they were purely donation run.

Due to the school not having advised me that they are not accredited and other issues, I moved my child the beginning of this school year.  I have received in the mail today a letter stating that I didn't make the minimum mandatory donations that were required from our family and that now if I do not make payment they will be sending me to collections.

Are mandatory donations legal?  Can I fight them on this as it wasn't called tuition in any of the documents they provided to me?  Or am I out of luck?

Thank you.

Answer
A school may be involved in conspiracy to evade taxes if it tries to call required payments from families as donations. See www.irs.gov/pub/irs-tege/eotopice96.pdf
which has examples of donations to schools that might be not
deductible as they appear to be tuition payments, which are similar
to your situation as the taxpayer has a child who is a beneficiary
of the 501(c)(3) organization. Especially note on page 2
---Start of Excerpt--
However, solicitation for contributions from parents of applicants
are made during enrollment of students or while the application is
pending, and children of parents who do not make or pledge a
"contribution" in the specified amount are not accepted. In
Situation 3, the organization admits or readmits a significantly
larger percentage of applicants whose parents made contributions
than applicants whose parents have not made contributions.
---End of Excerpt--

In any case, you wrote to me that you were never provided with anything in writing indicating such payments were mandatory, so you would not be liable for those payments.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

Expertise

I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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