Louis Goffinet, a 27-year-old teacher in Connecticut, said he started a fundraiser a year ago to aid local families affected by the coronavirus pandemic. The campaign was a smashing success, collecting more than $41,000 to help them pay for groceries, meals and rental assistance.
But Goffinet said he recently learned of a downside to his efforts: He now owes $16,031 in personal income tax on the funds he raised via Facebook Fundraisers.
“After consulting with several tax professionals, the unanimous consensus seems to be that I am responsible for paying income tax on the funds I was able to raise through Facebook,” Goffinet wrote in a Facebook post.
In his April 10 post, Goffinet is again turning to charity — this time to cover his own tax bill. “This is more than I can reasonably afford to pay alone, and am asking for the community’s help,” he wrote.
Goffinet said he raised funds through two Facebook fundraisers, one to assist local families with groceries and the other aimed at providing financial help over the holidays. He told the Hartford Courant that he didn’t create an IRS-approved charity, but instead deposited the funds in his bank account and then spent the money on whatever local families needed.
“I was so shocked,” Goffinet told the newspaper. “When I think about the mental spot I was in at the end of January, coming off a second fundraiser that was quite a lot of work — busy weekends coordinating Thanksgiving, holiday gifts — to get what I perceived as a bill in the mail for $16,000 was just shocking.”
Neither Goffinet nor Facebook immediately responded to requests for comment.
Pitfalls of donating via Facebook
The teacher told the Hartford Courant that he spent most of the money raised in the charitable campaigns on groceries, including 140 supermarket trips, as well as for Friday night dinners for 125 families and 31 Thanksgiving dinners. He also helped five families with their rent payments. He then received a 1099 form from Facebook stating that he would owe more than $16,000 on the fundraisers, he said.
Goffinet’s tax bill is due May 17, the date of the extended filing deadline set by the IRS. The situation highlights the pitfalls of raising funds through online services such as Facebook, rather than donating money through an IRS-qualified charity.
Facebook cautions in its terms of service for personal fundraisers that it is “solely your responsibility to assess, collect, report or remit the correct tax, if any, to the appropriate tax authority.” Donations made through personal fundraisers “generally are not tax-deductible under applicable law,” the company notes.