In April 2020, middle school teacher Louis Goffinet of Mansfield, Connecticut, started grocery shopping for elderly neighbors hesitant to enter a store when the coronavirus pandemic began.
“More people needed help. He was spending his own money because some people needed financial help. He decided to start a Facebook fundraiser. He set a $200 limit,” the Hartford Courant reported Saturday.
The teacher raised $41,000 using two Facebook fundraisers which helped hundreds of families with their groceries, rent, and holiday presents.
But in January, Goffinet received a 1099 form from Facebook saying he owed $16,031 in income taxes on the money he raised for his neighbors.
“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,” he added.
For the teacher, it was a huge amount of money.
“It’s not like I can say, ‘Oh, for the next month or two, I’ll dial down my expenses and I’ll save $16,000,'” he explained.
Dawn Brolin, a Certified Public Accountant who owns Powerful Accounting, said third party transaction sites, such as the one Goffinet used to raise the money, are required to send the form if the transactions are over $20,000.
According to its Help Center page, Facebook stated funds received through a personal fundraiser on the site may be taxable:
Factors that determine if the funds are taxable include the amount received, the intended use of the funds and the location where you reside. Please consult a tax professional for questions.
Note: If you raise more than $20,000 in donations from fundraisers on Facebook in a year, you’ll receive a 1099 form. The 1099 form comes from Stripe, the company that processes payments for personal fundraisers on Facebook.
“Yeah, it is in the terms. Maybe it’s naïve, but I didn’t think it applied to me. It wasn’t like I was raising $41,000 through Facebook for myself,” Goffinet commented.
Brolin is working with the teacher on the issue.
“Louis has to take, what we call, a tax position. He is going to take a position that says, ‘I meant this to be a gifting campaign to assist with families who are affected significantly by COVID,'” Brolin said, adding, “Now, the IRS can disagree.”
In addition, people have sent Goffinet $2,000 in checks to a post office box address to help toward the bill, according to the Courant report.