scienarasucka

I actually thought it was Ed Wynn at first...I turned to my husband and asked him "how could that guy possibly still be alive?" Yeah, he's really, really not.

Have you thought about the tax consequences for people whose debt you forgive? I think you could really end up screwing someone over, however good your intentions.

OK, so you're aiming for the gift exception -- meaning you won't be incorporating as a non-profit organization, I assume. I think these are very murky legal waters (will large donors need to file gift tax returns? how will this work with the money and debt being pooled?) and I wish you good luck because your intentions are good.

That's a terrible analysis. From the tax code link in that very article: "Even if you did not receive a Form 1099-C, you must report canceled debt as gross income on your tax return unless one of the exceptions or exclusions described later applies."

Just because they don't tell the IRS about it doesn't mean it's not taxable and that you aren't obligated to report it on your individual tax return. IF they can get it in under one of the exceptions, it should be fine, but I have my doubts about that. The chances of an audit may be really really low but I sure as hell wouldn't want it on my conscience if it did happen.

Anyway. I very much hope that Jubilee is getting competent legal advice re: their tax status as an organization (or a non-organization) and whether or not they can make gifts to individuals under the tax code. Their intentions are good and their goals are laudable.