John Berger said:

I guess I should sign up TEN for this but I am still concerned about the tax deduction component. It is clearly illegal for them to offer a tax deduction when people are receiving goods. The IRS is very clear on this - buying a $100 item and getting 5% off to charity is nice - but that 5% cant be deducted from your taxes as you received goods worth $100.

They are going to get burned on this and I am worried that if I list this on our site and promote it then am I promoting a tax fraud?

Hi John,

I understand your concern and I had the same concerns in the beginning when Christina asked me to check it out. So I did my due diligence and research to find out all I could about it before I decided to list LiA USA. Here is what I found out. I have the links to some articles on my flashdrive and will try and post them later but unfortunately I haven't found the box they are packed in yet.

igive was started back in 1997 and has been growing each year since. That fact alone was reassuring to me since they have survived and continue to grow for almost 11 years. In the beginning they did not offer any kind of tax deduction. But in 1999 they and their lawyers changed the system and with IRS approval have now been able to offer tax deductions with certain limitations.

First you need to understand that when you buy from an igive store member you are NOT getting a discount that is donated. The store is paying a commission to igive for directing the traffic to their store and you as the buyer get to direct igive to the charity that you want them to donate a portion of the commission to. So you are not actually getting a discount. When you order a $100 item you are paying $100. The tax deduction is possible because they allow the buyer to either donate their share of the commission OR take it themselves. If you notice on the site there is a box to check if you want to get the money yourself in the form of a check. In this way, if you choose to donate it becomes the same as writing a check to the charity and is tax deductible. The only catch is that in order to deduct the charity MUST be a 501c as per IRS requirements. So for an organization like TEN that is a 501c the buyer can legally take a deduction but for us at LiA USA since we are still in the process of getting our 501c the deduction would not be legal yet. I honestly believe this is legitimate according to all my findings and since they have been doing it this way for 9 years, I think I am right.

I hope this helps in clarifying it a little.