Corporate Taxes/Write Offs/Charity Donations - tax experts?

Two interesting situations in the last month with a business that has raised my eyebrows...wondering why, and if they are making money off these situations.

First: charity event is put on by this company. All donation checks are made out to the company and in turn, they cut a check to the charity and claim we can not claim it as a donation to a charity for our tax purposes. Are they making money off this? Wouldn't they have to claim this as income, then write it off as a donation? are those different rates? Can't figure out why they would do this, unless they are getting a tax break of some sort and screwing us.

And Two: Same company holds a fund raiser for a employee who has been injured. Instead of giving them the cash that was raised they give them gift certificates for gas, food, etc. Are they somehow writing this money off too? Again, I can't figure out why they would do it this way, unless there is a monetary benefit...

Tax experts? Realize there is a lot of missing info, but just raised my eyebrows.

As to the first item, it is possible that the company is correctly advising you that if you are geting benefits,you cannot claim the deduction. For instance, if you give $25 and you get a $25 dinner, you haven't really made a donation and you are not supposed to take a deduction.


In the second situation, the company may have been trying to avoid the appearance that it was providing the injured employee wages which would ave been subject to taxes. But there are easier ways to do this, such as by holding a fundraiser where people donate directly to the injured employee.

Gotta say though, the two situations together sound like either the company is hypersensitive to complying with the tax laws, or it's all a little sketchy.

If the charity,company,individual isn't a 501c3, you can't deduct your donations, even if it is a worthy cause. There is a lot of paperwork involved in becoming a 501c3.
I don't really like the way they're doing it, but it doesn't necessarily mean it's a scam?

How big is the company? The gift cards could be laziness (think it avoids being compensation or some such and they can't be bothered to figure things out or do the required work), paternalism, or just someone making money by buying them. Hard to say really but together it's... curious.

With the second situation it's likely they want the $ to go toward things they know the employee needs and don't want them (the employee) blowing the $ on hookers and blow. Paternalism, as Hugh suggests.

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Originally Posted by PassTheDutchie

With the second situation it's likely they want the $ to go toward things they know the employee needs and don't want them (the employee) blowing the $ on hookers and blow. Paternalism, as Hugh suggests.

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Rub is with the myriad ways to resell a gift card thee days it's clueless paternalism

Wtf did the thumbs down show up for?

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Originally Posted by Jamespio

As to the first item, it is possible that the company is correctly advising you that if you are geting benefits,you cannot claim the deduction. For instance, if you give $25 and you get a $25 dinner, you haven't really made a donation and you are not supposed to take a deduction.

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We got nothing, was a straight donation to a pretty large charity, the money was just funneled through the company...And the charity was a 501(c)3.

Not sure how large the company is, but I bet it does tens of millions in revenue, it's not small, but not huge.

Makes sense on the paternal thing, and that fits their character...just strange.