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Can a non-profit Org. cash a JP ticket and NOT pay taxes?

Topic closed. 38 replies. Last post 2 years ago by mcginnin56.

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Posted: May 24, 2012, 12:34 pm - IP Logged

I'm just wondering because I think it might be better to intentionally avoid paying taxes and just give myself a salary of a couple a hundred thousand a year. (plus living expenses of course)

    stripesnsolids's avatar - box
    GA
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    Posted: May 24, 2012, 3:14 pm - IP Logged

    That's an interesting question.......I'd like to know the answer as well.


      Bahamas
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      Posted: May 24, 2012, 3:27 pm - IP Logged

      I think you would undergo TONS OF SCRUTINY if this is a recently established organization by yourself. If it is a well known and reputable charity then I don't forsee any issues. I wouldn't elect this option if the primary purpose is to avoid taxes as Uncle Sam will be in your shorts and the media would track this story until they find a scandal to report. If you want your money DRIBBLED out to you in the form of a six figured salary, why not take the annuity or hire a business manager/tax attorney to put you on a stipend and leverage every advantage and loophole in the tax code?

      "Freedom of Speech? Keep reading and you will discover that freedom comes at a price!"

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        Kentucky
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        Posted: May 24, 2012, 10:11 pm - IP Logged

        I'm just wondering because I think it might be better to intentionally avoid paying taxes and just give myself a salary of a couple a hundred thousand a year. (plus living expenses of course)

        A jackpot winning ticket would be considered a charitable contribution and probably illegal for the charity to give the purchaser a kick-back. And not very many players would give away all their winnings just to avoid paying taxes.

        We know in Iowa even if the winner forms a trust, they require the identity of the player purchasing the ticket. Many states run background checks on winners to see if they owe back taxes, have outstanding warrants, and back child support. I'm pretty sure unless the ticket was placed in a collection plate or kettle, the actual winner would have to validate the ticket, pay the taxes, and then donate the winnings.

        You wouldn't benefit monetarily, but if the tax exempt charity cashed the ticket, it would just like every other tax free donation.

          Coin Toss's avatar - shape barbed.jpg
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          Posted: May 25, 2012, 12:43 am - IP Logged

          I'm just wondering because I think it might be better to intentionally avoid paying taxes and just give myself a salary of a couple a hundred thousand a year. (plus living expenses of course)

          There's an old joke, the difference betwen tax avoidance and tax evasion? 15 to 20 years.

          But what you're suggesting sounds more like tax evasion.

          In fact, it almost sounds like the old Universal Life Church tax scam- people would become 'ministers' in 'the church' (themself), give their whole salary to 'the church', pay themselves what they needed to live on (all of it), and write it all off as a charitable donation.

          Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

          Lep

          There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

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            NY
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            Posted: May 25, 2012, 9:30 pm - IP Logged

            I'm just wondering because I think it might be better to intentionally avoid paying taxes and just give myself a salary of a couple a hundred thousand a year. (plus living expenses of course)

            It would be perfectly legal to start a charity, donate a winning ticket, and act as a paid  employee of the charity, as long as it's a legitimate charity.

            You probably wouldn't even face serious scrutiny from the IRS, as long as you give away most of the money and your salary is only a tiny percentage of the charity's annual income. As a very rough guess you could eventually pocket 5 to 10% of what the ticket was worth. Before taxes, of course.


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              Posted: May 25, 2012, 10:15 pm - IP Logged

              It would be perfectly legal to start a charity, donate a winning ticket, and act as a paid  employee of the charity, as long as it's a legitimate charity.

              You probably wouldn't even face serious scrutiny from the IRS, as long as you give away most of the money and your salary is only a tiny percentage of the charity's annual income. As a very rough guess you could eventually pocket 5 to 10% of what the ticket was worth. Before taxes, of course.

              Thats exactly what I'm talkin about right there.

              Lets say I hit $100 million and instead of paying $40 million in taxes I want to become a charity and work full time locating, working with and donating to other charities at least the $40 million and all I want to receive is $200,000 a year plus living expenses.

              It would be legit and I would be actually working with established missions organizations around the world.

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                NY
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                Posted: May 26, 2012, 2:53 am - IP Logged

                What you're describing doesn't sound like a charity. It sounds like evadinging taxes on gambling income while using that income to pay yourself a salary to decide what legitimate charities to donate the income to.

                The question is whether you want to avoid paying taxes through legitimate charitable donations or put more money in your pocket. It's mostly an either/or choice; you can't do both well. You can legally avoid taxes by donating the money to a charity, but it's not a real charity if it's you slowly giving hoarded money to other charities while transferring some of the "charity's" funds to yourself. If you really want to donate to legitimate charities you can make big donations with the winnings before the end of the year or you can pay taxes on what you don't donate and make donations in future years.

                As Coin Toss says, there's a significant difference between avoiding taxes and evading taxes. If the IRS get a 1099 saying you won  $100 million with a return claiming you donated most of the money you can expect them to want documentation.  When they see  that you're an employee of the brand new charity that is the recipient of the money you're claiming as a deduction they're going to look more closely, and what you're describing is probably what the IRS will call tax evasion.


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                  Posted: May 26, 2012, 10:23 am - IP Logged

                  What you're describing doesn't sound like a charity. It sounds like evadinging taxes on gambling income while using that income to pay yourself a salary to decide what legitimate charities to donate the income to.

                  The question is whether you want to avoid paying taxes through legitimate charitable donations or put more money in your pocket. It's mostly an either/or choice; you can't do both well. You can legally avoid taxes by donating the money to a charity, but it's not a real charity if it's you slowly giving hoarded money to other charities while transferring some of the "charity's" funds to yourself. If you really want to donate to legitimate charities you can make big donations with the winnings before the end of the year or you can pay taxes on what you don't donate and make donations in future years.

                  As Coin Toss says, there's a significant difference between avoiding taxes and evading taxes. If the IRS get a 1099 saying you won  $100 million with a return claiming you donated most of the money you can expect them to want documentation.  When they see  that you're an employee of the brand new charity that is the recipient of the money you're claiming as a deduction they're going to look more closely, and what you're describing is probably what the IRS will call tax evasion.

                  Ok, lets just say that I want to "avoid" paying taxes.

                  Say that I'm willing to keep only the 5-10%. I get $7.5 million and write one check for the remainder to a charitable entity that I will not benefit from in any way. 

                  Can I then "dribble" $200k per year to myself for the next 40 years without being scrutinized?


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                    Posted: May 26, 2012, 10:45 am - IP Logged

                    Ok, lets just say that I want to "avoid" paying taxes.

                    Say that I'm willing to keep only the 5-10%. I get $7.5 million and write one check for the remainder to a charitable entity that I will not benefit from in any way. 

                    Can I then "dribble" $200k per year to myself for the next 40 years without being scrutinized?

                    All this effort and thought to avoid taxes, a noble cause to be sure.    Patriot      Why not just keep the whole enchilada ?


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                      Posted: May 26, 2012, 10:56 am - IP Logged

                      All this effort and thought to avoid taxes, a noble cause to be sure.    Patriot      Why not just keep the whole enchilada ?

                      All this effort and thought to avoid taxes, a noble cause to be sure.

                      Excellent choice of words mc,

                      fact is mc there are lots of people out there whom I feel have causes that are more noble than mine and would make sure the money goes to good use. As for me, $200k per year would be more than enough. lol.


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                        Posted: May 26, 2012, 11:05 am - IP Logged

                        All this effort and thought to avoid taxes, a noble cause to be sure.

                        Excellent choice of words mc,

                        fact is mc there are lots of people out there whom I feel have causes that are more noble than mine and would make sure the money goes to good use. As for me, $200k per year would be more than enough. lol.

                        Very noble of you, to give back to "more" noble causes.  Cheers

                        200K should be more than ample to live a gracious lifestyle.    Thumbs Up


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                          Posted: May 26, 2012, 11:26 am - IP Logged

                          Very noble of you, to give back to "more" noble causes.  Cheers

                          200K should be more than ample to live a gracious lifestyle.    Thumbs Up

                          Realisticly speaking,

                          with $10k a month (after taxes?) I could make payments on the house in Florida with a boat out back.

                          ($200k a year would make me a filthy 1%'er and at 40-50% tax I might get around $10k per month)


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                            Posted: May 26, 2012, 11:36 am - IP Logged

                            Realisticly speaking,

                            with $10k a month (after taxes?) I could make payments on the house in Florida with a boat out back.

                            ($200k a year would make me a filthy 1%'er and at 40-50% tax I might get around $10k per month)

                            I've got a boat out back (canoe), all I need now is a house in Florida!  Banana


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                              Posted: May 26, 2012, 11:41 am - IP Logged

                              I've got a boat out back (canoe), all I need now is a house in Florida!  Banana

                              CRAP, you half way there. Your further along than me.