It is very important to check to see if a charity is a qualifying charity. If an organization is a non-qualifying charity, the donation will not be eligible for the charitable tax deduction.
The following list is a sample of charities that do not qualify for tax deductible donations:
- Dues paid to country clubs, lodges, orders, and other clubs even if there is a minor charitable purpose behind them.
- Foreign charities are generally not eligible for tax deductible donation. However, a taxpayer can deduct contributions to a U.S. charity that transfers funds to a foreign charity. This will only be true if the U.S. charity controls the use of the funds. Furthermore, contributions to charities in Canada, Israel, and Mexico are deductible if the charity meets the same tests that qualify U.S. organizations to receive deductible contributions.
- Lobbying Groups
- Homeowners’ associations
- Individuals are not allowed to receive charitable donations even if they are doing charitable activities with the funds. The donation must be made to a qualifying organization that then donates the money to the individuals.
- Labor unions and union dues.
- Members of the clergy who can spend the money as they want
- Political groups or candidates running for public office
- Social and sport clubs
- Tuition to attend private or parochial schools, including supplemental schools at your place of worship or cultural center.
Non-Qualifying Charitable Organizations for tax deductions
These types of organizations are non-qualifying and donations to these types of organizations would be non-deductible for tax purposes even if there was some charitable effect. It is better to donate money to qualifying charitable organizations if a taxpayer wishes to have a tax deduction.
On an IRS audit, they will investigate what type of charity the funds were going to and if they are not qualifying the deduction will be disallowed. Thus, giving to a non-qualifying charity can ultimately cause an increase in taxes and exposure to IRS fees and fines.