Is Protest Travel Tax-Deductible?
More than a million people attended protests and marches over the weekend, including half a million in Washington DC. Protests and social movements are obviously an important part of civil society, but are rarely the focus of nonprofit scholars (aside: why is this?). But can one deduct the out-of-pocket expenses for traveling to participate in a protest/march?
Maybe. The tax code allows an itemized deduction for contributions made to a recognized 501(c)(3) nonprofit, which includes out-of-pocket expenses (such as travel) incurred while performing volunteer services for a nonprofit. Under some circumstances, traveling to a demonstration could meet this standard.
- Is there a qualified 501(c)(3) nonprofit involved with the demonstration?
In the past, many marches were organized and carried out by informal, grassroots associations, and this is still commonly the case. But demonstrations also can be organized, sponsored, or attended by formalized 501(c)(3) organizations. Thousands of groups nationally organized local marches or arranged to send people to DC. Also note that for many demonstrations, such as the ones this weekend, there is no issue about partisan political activity (the election has already happened) or lobbying (not seeking action on a specific piece of legislation).
2. Is the individual’s attendance at a demonstration performing services for the 501c3?
The trickier question is whether an individual’s participation in a march is performing services for a particular 501(c)(3). It will depend on the specific circumstances of the participation. Whether a volunteer is working for an organization is, in general, a complicated topic, in no small part because volunteer’s relationships with nonprofits is usually not as formalized or regimented as an employee’s.
“In determining whether a taxpayer has provided services to a particular organization, courts consider the strength of the taxpayer’s affiliation with the organization, the organization’s ability to initiate or request services from the taxpayer, the organization’s supervision over the taxpayer’s work, and the taxpayer’s accountability to the organization.” Van Dusen v. Comm’r, 136 T.C. 515, 523–24 (2011) (citing Smith v. Commissioner, 60 T.C. 988 (1973); Saltzman v. Commissioner, 54 T.C. 722 (1970)). In recent years, the tax court has taken a fairly broad view of when an individual is performing services for a nonprofit. For example, the tax court allowed a deduction to an individual who took care of foster cats for a nonprofit, but then started trapping and caring for her own wild cats without telling the nonprofit. The court found that the unapproved foster care was in furtherance of the nonprofit’s mission, even though the volunteer did not seek permission from (or even tell) the organization.
The Tax Court described two relevant precedents:
For example, Smith v. Commissioner, supra at 993–995, held that church members could deduct evangelism travel expenses even though their church never initiated, controlled, supervised, or assisted with the trips. The church encouraged missionary work in general; and before the taxpayers embarked on a trip, the church gave them letters of commendation, which evidenced the church’s approval and served as introductions to intrafaith groups during the trip. Id. at 993. Additionally, after each trip the church members reported back to the church, which then publicized their efforts and accomplishments to other congregations. Id. By contrast, in Saltzman v. Commissioner, supra, the taxpayer’s activities had much looser ties to the charitable organization. The taxpayer was the leader of the Harvard–Radcliffe Hillel Folk Dance Group. Id. at 722. Without the organization’s asking him, he traveled alone to Europe and Pittsburgh to attend folk dance festivals that were not sponsored by the organization. Id. at 723. We held that the taxpayer had not provided services to the organization, partly because the organization had not directed or encouraged him to attend the festivals. Id. at 724.
Van Dusen v. Comm’r, 136 T.C. 515, 523–24 (2011). Other IRS guidance contrasts attending “a church convention if you go only as a member of your church” versus as one of the church’s “chosen representative[s].”
However, the tax court disallowed a deduction over $250 because the taxpayer lacked a statement from the organization substantiating the expense.
In light of this reasoning, having an organization substantiate one’s participation is useful to claim the deduction, and necessary for expenses over $250. And what sort of demonstration activities count as service?
If you are tasked with a specific job—say, passing out water, providing directions, pointing people in the right direction—you’re more likely to be performing a service for the nonprofit.
Similarly, if a nonprofit selects you as one of the people to travel to a march—perhaps with the intention of representing the nonprofit’s position or brand or showing the organization’s support for the march—that, too, will likely count.
In contrast, simply showing up to join the crowd—even if your presence adds to the demonstration (as any demonstration is better the more people are willing to donate their time to it)—you’re less likely to qualify.
Stay safe and march on. But be sure to consult with a tax pro before deducting your trip.
@JosephWMead