Martin M. Shenkman, Bernard A. Krooks, Jonathan G. Blattmachr
While the amounts solicited in many online campaigns are modest, the dollars
involved across the spectrum of all charitable-type crowdfunding sites is significant.
Considering the aggregate funds involved, it’s surprising that some crowdfunding
sites appear to provide limited guidance to visitors, donors, those creating
campaigns or those benefiting as to the tax consequences.
It’s unlikely that many users are even aware of the possible tax issues for the various
types of campaigns. This is why guidance from the Internal Revenue Service
providing some practical leniency and updating policies to reflect the realities of the
crowdfunding phenomena is important.