Volume 35 Number 39
Produced: Tue Aug 7 5:38:18 US/Eastern 2001
Subjects Discussed In This Issue:
Money Games and Israel's Red Cross
[Jack Tomsky]
More on taxes
[Michael Feldstein]
"Pass Through"
[Martin Dauber]
Tax system? How About Welfare (2)
[Gershon Dubin, Zev Sero]
Taxes
[<rubin20@...>]
Taxes, Cheating and Scrip
[Hillel (Sabba) Markowitz]
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From: Jack Tomsky <jtomsky@...>
Date: Fri, 03 Aug 2001 09:09:02 -0700
Subject: Money Games and Israel's Red Cross
I remember in the early 1960s in Roselle, New Jersey we used to go to a
woman in my apartment village (she lived upstairs from me) who was a
representative of Hadassah and would give her cash for the amount we
planned to spent at the supermarket across the street. She in turn
would give us a type of coupon/receipt. At the supermarket it would be
presented to the checker after your groceries were totaled up and there
would be a nice discount to Hadassah. If you spent less then your given
amount you were given cash back. You could purposefully give her a
larger check and receive cash back at the supermarket thus saving you a
trip to the bank downtown by bus. Especially in the dead of Winter. Few
women had cars in those days.
The majority of Jewish women of our area were in Hadassah and were
saving as one of the chapter groups to buy blankets and ambulances for
Israel's Red Cross - Magen David - I think the name was.
Marilyn Tomsky
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From: <MIKE38CT@...> (Michael Feldstein)
Subject: More on taxes
Carl Singer suggests that a portion of full Yeshiva tuition payments
should be tax deductible, since not everyone pays full tuition. In
fact, I know of two schools--Ramaz and Westchester Day School--who in
fact break down tuition payments into two portions, a main portion (not
tax deductible) and a second portion (where the check is made out to a
Special Needs and Scholarship Fund). My accountant friends tell me that
it's a gray area, but these two schools are apparently allowing their
parents to take advantage of the deduction. Other yeshivot might want
to explore this practice, too.
Michael Rogovin laments the common practice of Jewish organizations
selling scrip, thereby encouraging tax fraud. In this situation, I
think there is an easy answer that could allow the practice of scrip to
continue. If the Jewish organizations would simply send a tax
deductible receipt to the buyer of scrip for the 10% instead of doing
nothing and claiming that it's up to each individual to deduct what is
proper, the problem would be solved. In this way, the organization is
recording the proper amount that is deductible, the individual can still
benefit with a smaller (but legitimate) deduction, and the commercial
operation can benefit by increased business. Why more Jewish
organizations don't do the right thing and notify individuals of the
proper deduction is a good question--and something that honest Jewish
taxpayers should be demanding of their shuls and yeshivot.
Michael Feldstein
Stamford, CT
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From: Martin Dauber <mhdauber@...>
Date: Thu, 2 Aug 2001 14:22:02 -0700 (PDT)
Subject: "Pass Through"
In reagrds to Carl Singer's comment about "us" not having the mechanism
to contribute appreciated equities to our Mosdot...
I wondered aloud with Rav Chaim Pinchas Scheinberg, Shlita, about the
same thing last year and found out that there is such a program.
The JUF of chicago has a "donor directed" fund available. It has worked
for me; the only caveat I give you is that the minimum contribution
(outgoing) is $100.
Try www.juf.org or contact me for more details.
Moshe Tzvi Dauber, MD
Lincolnwood, IL
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From: Gershon Dubin <gershon.dubin@...>
Date: Thu, 2 Aug 2001 13:42:27 -0400
Subject: Tax system? How About Welfare
From: Yeshaya Halevi <chihal@...>
<<Many able-bodied men spend their days in a kollel instead of working
and paying taxes. Then, on top of that, their family gets Welfare and
food stamps, which are paid by people who work and are taxed on wages.
Is this theft?>>
Is this question to be applied to graduate students in secular
fields? Or undergraduate for that matter. How about Christian seminary
students? People who choose to work at jobs which pay less than the
threshhold for these entitlement programs, such as teaching, social
work, etc.?
Gershon
<gershon.dubin@...>
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From: Zev Sero <Zev@...>
Date: Thu, 2 Aug 2001 20:18:14 -0400
Subject: RE: Tax system? How About Welfare
Yeshaya Halevi <chihal@...> wrote:
> 1. Since the government doesn't tax donations to a shul, mosque or
> church, can a person who buys something central to his/her belief
> system deduct it from their income tax? An example: the money I
> spend to buy a mezuza, which the Tora commands. (For the record,
> my Orthodox accountant, a musmach [ordained rabbi], says "No." But
> what do **you** think?)
Not as stated. But by far the major component in the price of a mezuza
is the sofer's time. Suppose an institute were to be established,
similar to a kollel, to pay soferim a stipend so that they could be free
to devote their time to Torah study and the practise of safrut. Those
who donated at least a certain amount would become members of this
institute, and among the privileges of membership would be: a) the right
to buy mezuzot at actual cost, i.e. the cost of the materials, and b)
free checking of mezuzot. I don't see why membership fees to such an
institute would not be tax deductible.
By reference, I am a member of the Cato Institute, I pay a tax
deductible membership fee, and as a privilege of membership I get
certain of their publications for free. If I paid a higher membership
fee, and therefore had a higher membership level, I would get more free
publications. Cato is a high-profile organisation in Washington DC,
with lots of enemies in the IRS, and if this scheme were at all illegal
I'm sure it would have been stopped by now.
> 2. Many able-bodied men spend their days in a kollel instead
> of working and paying taxes. Then, on top of that, their family
> gets Welfare and food stamps, which are paid by people who work
> and are taxed on wages. Is this theft?
Many able bodied men and women spend their days in front of a TV instead
of working and paying taxes, and get welfare and food stamps, and
gawdknows what else. I resent the fact that I am taxed for this, I
regard this tax as theft (hence I feel no moral compunction at all about
tax evasion, leaving aside any halachic issues), but that is the system
that the legislatures have established, and until it is repealed people
are legally entitled to take advantage of it. Certainly those who use
their taxpayer- subsidised time learning Torah instead of watching TV
are to be praised; if all the people who took money from this scheme
were learning Torah or doing other socially useful things, I wouldn't
even personally mind the money taken from me, even though I'd still
oppose it in principle.
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From: <rubin20@...>
Date: Thu, 2 Aug 2001 16:49:08 -0400
Subject: Re: Taxes
> The outraged responses to the tax posting have all been very
> encouraging. Unfortunately, given the nature of the MJ audience this is
> sort of preaching to the choir. Another aspect that hasnt been
> mentioned is that this "rabbi" is counseling nothing more than ganeiva
> (theft), which is a Torah prohibition. Therefore he should be in the
> category of meisis u'madiach, encouraging people to break Torah
> prohibitions. That should probably be enough for anyone.
Lets not get caried away here. Theft is a stretch, as while you may be
obligated to pay taxes, you are not takeing anything from the
gov. merely not paying your requierment. Sort of like not paying a loan,
which is not theft but " a wicked borrower who dosn't repay"
> 1 - we don't have a legal generic "pass thru" Jewish Charitable fund for
> accepting stock donations -- Let's say I want to give $18 here and $36
> there, etc., all bits & pieces too small for selling stock -- I need a
> legal vehicle to which I can donate highly appreciated stock (let's say
> 10 shares of plony.com worth $500) thus not paying the capital gain, and
> have the proceeds passed on when / where / amount that I choose, to
> several charities that may, themselves to too small or unsophisticated
> to deal with stock. Similarly, lets say I want to pay my shule dues
> with appreciated stock -- today many congregations don't know how to
> make that happen.
> 2 - our religious school tuition system is backwards -- say there are
> 300 children in your school and tuition is $8,000 per child. This would
> imply that $240,000 is raised each year in tuition. Instead only
> $150,00 is raised in reality as many children are on full or partial
> scholarship. So the average tuition revenue is $5,000 per child
> ($150,000/300), not $8,000. If properly structure (and I am not a tax
> lawyer) a tuition / voluntary giving program could be established with
> tuition at only $5,000 per child. And my $8,000 payment would be $5,000
> tuition & $3,000 scholarship fund -- and thus $3,000 is tax deductable.
Actually, I personal run such a generic-pass through organization
(limited to my towns-sorry). And every school I know of allows your
suggestion number 2. I am a former school administrator,and our CPA said
it was no problem to give receipts for anything more than the basic
tuition charged i.e. lowest normal tuition.
> Many able-bodied men spend their days in a kollel instead of working and
> paying taxes. Then, on top of that, their family gets Welfare and food
> stamps, which are paid by people who work and are taxed on wages. Is
> this theft?
WHAT IS THE QUESTION HERE?!?! One may disagree with their choice, one
may even lobby the gov. to abolish programs for those who were voluntary
unemployed. But assuming the students in question follow all the
reporting requirements, what is the reason to think it may be theft. As
an aside, graduate student all over the country take advantage of these
programs. The Columbia Law School financial aid form has a line for
every government program under the sun!!! Financial advisors in PHD
programs will tell you that a large percent of students accept
programs. And that is besides all the money the gov. gives colleges and
their students.
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From: Hillel (Sabba) Markowitz <sabbahem@...>
Date: Thu, 2 Aug 2001 13:56:36 -0400
Subject: RE: Taxes, Cheating and Scrip
>From: Michael Rogovin <rogovin@...>
>I have seen the following fundraiser sponsored by yeshivot and
>synagogues in my neck of the woods: purchase your candy, liquor, etc at
>store x; make out the check to the sponsoring yeshiva or synagogue. The
>yeshiva/synagogue gets 10% of your purchase.
In my community (Baltimore) the following analysis can be made.
1. The store states that purchases of certain items are going to have
10% of the purchase price turned over to the institution. Sales taxes
are charged as normal, the store owner is the only one who can take a
charitable deduction.
1a. If the purchaser writes the check to the institution (in order to
be certain the store owner keeps his word) then when the store owner at
the end of some period (week, month etc) does the accounts, he
determines that he owes the institution a certain amount. If the checks
written to the institution cover that amount, then he just turns them
over. If they do not, then he writes an extra check. If they are more,
then the institution owes him the change. In any case the store owner
gets the deduction and not the purchaser.
2. Sometimes the store owner in order to get business will state that he
will pay the sales taxes. Sales tax is due from the store owner whether
or not the purchaser pays it and is sent to the state every tax period
based on the total amount of business done. The adding of sales tax
separately when we buy is just a convenience for the store owner's
records and so he will not have the extra expense.
3. Certain sellers (like nonprofits) are exempt from sales tax so when
the Yeshivah buys an item (at 90% in your example) and then resells it,
the item is exempt from sales tax to begin with. This is the case with
candy sales and the like (though candy sales were usually 50% when my
children were young enough to take part).
4. The supermarket scrip is purchased from the institution at the face
value and used as if it were regular money. Thus sales tax is collected
at the store and the individual is not allowed to deduct the value of
the scrip (since he does get goods or services for it). The store owner
uses the scrip as proof that a certain amount of business was done in
his store in accordance with his offer to donate a percentage. The
institution had been holding the money (for the individual) and turns it
over to the owner when he presents the scrip minus the amount that the
store owner owes the institution (in accordance with his pledge). Thus
the money is a valid donation by the store owner. The scrip is only an
accounting convenience and is used to get an economy of scale.
Hillel (Sabba) Markowitz - <sabbahem@...>
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End of Volume 35 Issue 39
