QUESTION
I have a family member who owns an NGO in Haiti and wants to collect donations through paypal on his website online but is not a US citizen.
Asked on Aug 14th, 2012 on Business Law - Florida
More details to this question:
I am currently a US citizen but I want to make sure everything I do iegal. Can I open up a bank account under my name to collect money for this NGO (it''s in Haiti). Would I have to report this $$$ to the iRS? Would I have to make this organization become 501c3 so that it''s tax exempt? Please feel free to reply with as much details as possible and if there are any alternatives. Thank you.
1 ANSWER
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It is perfectly legal for you to collect donations for a bona fide charity in Haiti. You are acting as a nominee or stakeholder for these amounts and they are technically not taxable income to you. That having been said, you will need to take great pains to document that these funds collected by you under the direction and control of the ultimate recipient and remitted directly to them promptly following receipt.
PayPal is happy to do business with non-U.S. citizens outside the U.S. Your family member should exhaust opportunities to deal with PayPal and alternative vendors, such as Dwolla, before dropping this in your lap. It is a lot of work for you and potentially a tremendous burden in terms of documentation if you are audited.
Answered on Aug 14th, 2012 at 3:09 PM