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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 118061
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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A person donated a horse to our therapy program 2 years ago.

Customer Question

A person donated a horse to our therapy program 2 years ago. She promised to sponsor the costs for keeping the horse and that promise was included on the donation agreement. We allowed her to visit the horse anytime she wanted. She became disruptive to our program and we tried to set some boundaries on her visits. She engaged an attorney and is threatening to use unless we return the horse. The attorney's letter states the donation agreement was really a boarding agreement and by setting boundaries we violated the agreement and nullified the donation. Because we are small and don't have a lot of money, we can't fight them and we are returning the horse. We cannot get an answer from the IRS if this will jeopardize our tax-exempt status or what should be done about the donations receipts we have given her for two years. In addition, we are return the horse in far better condition than when she donated.
Submitted: 2 years ago.
Category: Legal
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
If what will jeopardize your tax exempt status, returning the horse to a trouble maker donor who is harassing your organization and may try to force you to spend money on litigation you do now want to spend?
If the person's attorney says the donation letter is a boarding agreement, then she cannot have it both ways. If it is a boarding agreement, then all tax donation receipts you provided her are void and she should receive the W-9 for tax reporting. If it is a donation, then no W-9 is necessary.
However, this type of dispute over donated items occurs frequently with tax exempt organizations and it would not cause the organization to lose its non-profit status just because you settle an issue over a donation from a disgruntled donor.
Getting an answer many times from the IRS, which has so many things going on, is like trying to light a match in a hurricane. So the fact you cannot get an answer from them is not very surprising.