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#194567 - 04/30/06 08:29 PM SPSC and IRS regulations
Anonymous
It has been suggested by several that this topic be moved to the general chat section. I agree as it really has nothing to do with the fundraising efforts for Julia and her family - despite the efforts of several to make it so.

What follows is a response to several questions posted on the "Fruit lady" thread.

From Pedro 1: It would be nice for the SPSC to see their way to donating a little money towards Julia's happiness.

And:

IM-what about money collected here-surely it was not sent to the US to make sure that non taxable contributions paid in Belize would be non-taxable in the US-
If I am not making sense let me give you an example-I being a resident of Belize who is an English national donates money to the SPSC and you report my donations to the American tax authorities


From Gail M:
Peter has a valid question: This is an email from Ernie sent to members last August -

"what we have done: Thanks to your support, we have raised and deposited into the corporation’s bank accounts both in the U.S. and in San Pedro, about US$22,500. We transferred US$12,500 to the Alliance Bank in San Pedro in preparation of getting something going on the kitchen/lunch room and to demonstrate to the local businesses on the island that we are very serious about our commitment to working with the local economy. We want them to know the money is in “Their” country, in “Their” bank."
Did that money get transferred to a US Bank and if not, could some of it possibly be donated to the Fruit Lady cause? I bet she has several kids in school in San Pedro, which seems like it would make these funds qualify.

And:
Sorry I didn't finish and for some reason I can't remain logged in to edit my post.
Anyway, sort of establishing a scholarship to support her child through school for the next week, month, year whatever the "club" decides.
I don't know what the bylaws for SPCS state, so I don't know how funds can be dispersed.


From bywarren:

I have donated to your cause, as you are aware, by depositing funds in the Alliance Bank. You state that your organization is "as previously discussed, the SPSC is bound by the Charter of the State of Texas as well as Federal and IRS regulations, as to how we can disperse funds." Would you please explain to me and others who have given you money exactly how and when you plan to put these funds to use.

I think your organization owes those of us who have donated more of an explanation and accounting for our funds than you have given up to this point. I cannot except the rational that the reason the funds have not been put to use here in San Pedro is that you are " bound by the Charter of the State of Texas as well as Federal and IRS regulations, as to how we can disperse funds." That is not acceptable to me.



Okay Folks - here’s the deal, I’m going to attempt to provide a very simplified explanation of IRS regulations as they pertain to organizations with 501(c)(3) tax-exempt status :

1. Peter, I love you to death man, but you are barking up the wrong tree here. SPSC’s 501(c)(3) status is not based upon who donates, it is based upon how they distribute the funds they raise.
If I am not making sense, let me give you an example - You, being a resident of Belize who is an English national, donate money to the SPSC; as an English national, you may or may not be able to take a deduction from your taxes for that donation, depending on English law. Whether you do or not is irrelevant to the American IRS, they don’t care if you take a deduction or not (and the same would be true for an American citizen who donates) for purposes of determining whether SPSC is in compliance with IRC section 501(c)(3). The only thing that matters to the IRS is that the funds in the SPSC account are NOT distributed in contravention of the Internal Revenue Code.
Pursuant to the Internal Revenue Code, “No part of the net earnings of an IRC Section 501(c)(3) organization may inure to the benefit of any private shareholder or individual.” “In addition, assets of an organization must be permanently dedicated to an exempt purpose. This means that should an organization dissolve, its assets must be distributed for an exempt purpose described in this chapter, or to the federal government or to a state or local government for a public purpose.”

That means SPSC CANNOT donate a portion of its funds to Julia, or any other private individual, no matter how much you might want them to or even how much SPSC might want to. To do so would put their tax exempt status in jeopardy. What that would mean is that they would no longer be deemed tax-exempt and a good portion of the funds they raise would end up being paid out to the US government in taxes. None of us want that. As it stands now, as long as SPSC operates as a not-for-profit corporation, they pay no taxes on any money they raise. As soon as they utilize the funds for a purpose prohibited by the IRS, they stand to lose tax exempt status and a good portion of their cash on hand will immediately be due in taxes. Make Sense??????

2. Gail, it doesn’t matter whether the money is held in a Belizean or American bank. The funds are part of a United States 501 (c)(3) corporation and are governed by the laws applicable thereto. That means those funds cannot be donated to an individual. Nor can they be put into a “scholarship fund” designed to benefit a specified individual. SPSC didn’t make up those rules, that would be the Internal Revenue Service. SPSC is just trying to follow the law.

As an aside, if you don’t know what the bylaws for SPSC state, and so don't know how funds can be dispersed, you might consider requesting a copy if you are a member. Unless of course that wasn’t the real intent of your post to start with.


3. Bywarren, you have asked for an explanation of “exactly how and when” SPSC plans to put their funds to use. You state that you and others are entitled to more of an explanation and accounting than have been given up to this point. Finally, you state that an explanation that SPSC is "bound by the Charter of the State of Texas as well as Federal and IRS regulations, as to how we can disperse funds" is not acceptable to you.
Initially, I’d like to know which other charitable organizations to which you donate reply to this type of question on a public message board. Seems to me if you have questions about what is being done with money you donated, you’d go directly to the organization rather than attempt to malign a single individual associated with the organization - but, hey, that’s just a freebie thrown in by me.
With respect to how and when SPSC plans to put their funds to use, I believe that question has been answered. Mr. Brannon stated that SPSC and the Calendar Girls project currently have on hand enough cash to account for approximately 90% of the costs of completing the elementary school classroom building project; however, they have had some difficulties with various San Pedro officials. They continue to work on solving these difficulties. What part of that did you not get? If you desire further explanation, what have you done to obtain such? With respect to you finding IRS regulations regarding how 501 (c)(3) funds can be disbursed unacceptable, perhaps you could take that up with them. Let me know how that works out for you.

Finally, Jesse aka San Pedro Daily, your personal animosity toward Mr. Brannon is well-known. Ernie’s a ornery ole coot and doesn’t need me to stick up for him, so you two can fight that one out. I’ll just say on a personal note that I believe it speaks volumes about your character that you would attempt to undermine the work of a charitable organization to further a personal vendetta.


The fund raising for Julia and her family is a very worthwhile project. I support it, and many other projects carried out for the good of San Pedro and its wonderful citizens. However, it is a completely separate issue from how SPSC funds can be utilized. If anyone has questions about the applicable IRS regs, feel free to PM or email me and I’ll do my best to answer them; however, I’ve said all I’m going to say on this topic in a public forum. I have to get back to the Sex in Belize thread.

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#194568 - 04/30/06 08:53 PM Re: SPSC and IRS regulations
Ernie B Offline
Well I sure wish I would have known Hootchie was going to make this post. I just spen an hour pecking out my responce. I think I like hers better, Thanks LH!
_________________________
Gun Control is Hitting Your Target.

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#194569 - 04/30/06 09:21 PM Re: SPSC and IRS regulations
San Pedro Daily Offline
Quote:

Finally, Jesse aka San Pedro Daily, your personal animosity toward Mr. Brannon is well-known. Ernie’s a ornery ole coot and doesn’t need me to stick up for him, so you two can fight that one out. I’ll just say on a personal note that I believe it speaks volumes about your character that you would attempt to undermine the work of a charitable organization to further a personal vendetta.
[/QB]
There's no personal vendetta here. I don't know Mr. Brannon, only what I read on this message board. He seems to have taken personally my objection to the original plan to create an in-school feeding program. When the Calendar Girl Project came along I supported that in every way I could and was very pleased when Ernies group joined in.
This latest "incident" can't possibly be called an attack on Ernie:
1. reaper: So who holds the purse strings to the San Pedro Social Club vault? Could the SPSC donate a few $$$???
2 me: SPSC has committed all their funds to the project to build 3 new classrooms at the RC school. Last word was that SPSC had then gone into hibernation.
3. ernie: San Pedro Daily; re: SPSC. I am compelled to comment on your stupid reference to the SPSC. As usual, you are misinformed. The SPSC has not gone into hibernation as you have stated. We and the Calendar Girls are being "Road Blocked" at every turn by the Mayor, Town Board and the School Board. It appears they are not interested in getting the new school rooms that they despertly need. It was reported that the school turned away approxamatly 150 kids last fall because they didnt have room for them. We (Calendar Girls & the SPSC) currently have on hand enough cash to go about 90% of the cost and have the ability to finish the project if only the powers that be would allow us to. Law is correct, our State Non Profit Charter and IRS application for non profit status is very strict in what we can do with our funds and what we cannot do with our funds. I dont want to start a war with the San Pedro Daily, but it would be nice for you to report accurately, or put it on the 'Opinion Page' and get a different opinion from others that may be a little more knowdlegeable on the subject. Because you say it, does not make it fact.
4. me: quote:Originally posted by immissing:
Back in January, I notified all members that I resigned my position as President of the SPSC for personal reasons. For all pratical purposes, the SPSC is in a state of "Inactive". This is due to the fact that I sent a questionaire to members asking if they would support the SPSC again this year andd the responce was not favorable. A lot of people worked very hard to get us to where we are today,but burn out is a reality. The Board of Directors voted to throw our support behind the Calendar Girls project to build classrooms at the RC School. So far, no funds have been dispursed. No official "Partee" has been planned due to the lack of responce back in January. This does not mean a party cant be held if someone would take the lead and organize it. No funds, dues, etc,etc, has been ask for, again , due to the lack of interest from the general membership.
Ernie

It seems to me that Ernie is quick to see anything I post as an attack. In this case I was trying to post an honest answer based on Ernies previous posts.An old saying comes to mind: "Paranoia will destroy ya"

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#194570 - 04/30/06 09:35 PM Re: SPSC and IRS regulations
Pam&Dave Offline
bywarren / Don't let this attorney's language intimidate you. People in the legal profession have been intensely schooled on the proper verbage and application of such to discredit, intimidate and confuse the opposition. That is their job. Some are better than others. If she were representing you on this matter, these methods would be used to defend and justify your interest. I am sure Mr. Brannon will publish a complete financial accounting. He has a duty to do so even though he has resigned as President. You had every right to express your concerns and questions on this message board. It is obvious that some members of the SPSC are not all that comfortable with the way the organization has been handled. Maybe lawcucui would be interested in heading up SPSC. It appears she is their present acting legal counsel as well as Public Relations spokesperson, why not President? Maybe she will have better luck at persuading the Mayor and others of San Pedro to accept the funds that have been collected for their benefit.
Good Luck to all concerned. Remember, your hearts are in the right place, no matter how you might feel after reading the lawcucui post.
Pam
_________________________
"Nothing can bring you peace but yourself"

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#194571 - 04/30/06 09:56 PM Re: SPSC and IRS regulations
myako Offline
Pam&Dave are educating bywarren as to the ways of the world, now that is classic. Get some popcorn people this may be fun. lawcoocchie is right on in my book

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#194572 - 04/30/06 10:03 PM Re: SPSC and IRS regulations
Pam&Dave Offline
Maybe I should have put it in legal terms. I'm not "educating" anyone. I think Jesse's quote sums it up, "Paranoia will destroy ya." What's in it for you?
_________________________
"Nothing can bring you peace but yourself"

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#194573 - 04/30/06 10:07 PM Re: SPSC and IRS regulations
myako Offline
Nothing at all. We do find the constant picking by the same people to be concerted and transparent. Are you a member or a crab

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#194574 - 04/30/06 10:17 PM Re: SPSC and IRS regulations
sandb Offline
Quote:
Originally posted by Pam&Dave:
bywarren / Don't let this attorney's language intimidate you. People in the legal profession have been intensely schooled on the proper verbage and application of such to discredit, intimidate and confuse the opposition. That is their job...Pam
I thought her contribution was well thought out and reasoned...didn't see any "attorney's language", nor anything confusing in the least.

By the way, wasn't it great to see a thread gone down hill and off-topic repositioned to the Chat Area? What a shame it doesn't happen with more frequency.

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#194575 - 04/30/06 10:24 PM Re: SPSC and IRS regulations
Catatonic Motivator Offline
Excellent example of why a lot of people with good in their hearts were driven away by people with paranoia in their heads. My contributions have ceased, as have most others, not due to Ernie's actions at all but, instead, as a reaction to the incredible negativity expressed by so many who questioned his intent. SPSC was, for the most part, good people trying to do good things.

Perhaps charity should be left to those who are blessed and compassionate enough to make it happen.

LC, nice job of trying to educate the uninformed. Unfortunately, I suspect it'll have the usual impact.
_________________________
* I Go Pogo *

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#194576 - 04/30/06 10:25 PM Re: SPSC and IRS regulations
klcman Offline
P&D - are you not the one who was chastising others yesterday for being "condescending"? :rolleyes: talk about hypocritical commentary......

Your pompous reply does not change the facts ( re law, no pun intended)that everything she stated is accurate.

And for those who might have conveniently forgotten,if indeed they ever knew, the classroom building is NOT an SPSC venture, but the SP Calendar Girls. As Mr. Brannon has enlightened us several times in prior months, publicly on this forum, the emphasis was shifted to aiding them in their effort, since SPSC efforts at mobilizing a school lunchroom program had received insurmountable barriers.


I've got $100US to add to the classroom building that says P&D are NOT members of the SPSC, if anyone is up for the challenge.
_________________________
_ _ _ _ _ _ _________________ _ _ _ _ _ _
But then what do I know, I am but a mere caveman

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