I'm a bit confused about whether or not the processing fees borne by a Church or charitable organization must be deducted from a giving statement.
My 501(c)3 accepts charitable contributions via credit card. We do not charge processing fees to the donating individuals but "eat" the cost of the donation.
For example: George donates $2000 to our organization via our online form. We do not charge him a processing fee in order to give us $2000.
Stripe processes the donation and charges us a 2% fee so we actually receive $1960 because his donation was processed by Stripe.
Do we issue a giving statement to George for $2000 or for $1960.
Remember, we didn't charge him a processing fee in order to contribute $2000 to us. We pay the fee in order to make it convenient for George to donate to us.
$2,000 is the amount that should be documented on the giving statement to George. He donated the full amount to the nonprofit organization and is allowed to claim the full amount. The IRS allows these fees to be deducted for business taxes.
Thanks. The "business" can't really deduct the expense because it's a non-profit and pays no taxes in this case.
No, you do not pay taxes so there is nothing to deduct from. It is just a business expense.
Let's say the organization in this example decides to allow them to add an additional 40 to "cover the cost" of the transaction fee so that $2000 is still net to the organization. So the transaction is $2040 to the donor, but the organization is still going to have a 2% fee in this example from the $2040 which would net $1999.20. Shouldn't the donor still deduct the transaction as it shows on their statement the full $2040? They choose to have it go towards the fees but in fact it's a non-restricted donation and the donor receives no benefit from donating another $40.
What about if the organization in this example decides to allow them to add an additional 40 to "cover the cost" of the transaction fee so that $2000 is still net to the organization. So the transaction is $2040 to the donor, but the organization is still going to have a 2% fee in this example from the $2040 which would net $1999.20. Shouldn't the donor still deduct the transaction as it shows on their statement the full $2040? They choose to have it go towards the fees but in fact it's an additional donation to the organization.