A Connecticut middle school teacher who raised thousands of dollars to buy groceries for local families impacted by COVID-19 got some good news.
"I got a tremendous amount of support in the past few days. About $13,000 has been sent in from all around the country," Louis Goffinet said.
With no charity or fundraising background, Goffinet started an online fundraiser to help his Mansfield neighbors buy groceries during the coronavirus pandemic.
"I had the original goal of just raising a couple hundred dollars and that quickly snowballed,” Goffinet initially told NBC Connecticut.
Goffinet raised more than $40,000 online and he used the money to fund 140 family grocery trips, 125 family dinners, 80 Thanksgiving pies, 31 Thanksgiving dinners, rental assistance for five families, and to help 20 people buy holiday gifts for their children.
Goffinet said his work felt amazing, but when he got the news that he had to pay thousands of dollars in tax money, he felt the opposite.
In February, Goffinet received a 1099-K form from the Internal Revenue Service (IRS) in the mail. The form let Goffinet know that $41,000 of the money he raised online was considered taxable income. According to an accountant, that translates to a tax bill for Goffinet of about $16,000.
Goffinet said he recently met with Certified Public Accountant Dawn Brolin who said the donations don't count as income. He said Brolin, who owns Powerful Accounting, reviewed his financial records and consulted with a tax attorney.
"She consulted with a tax attorney and agrees that we can reasonably file with virtually no tax burden from the fundraiser," Goffinet said.
Brolin spoke with NBC Connecticut last week and explained that third party transaction sites, like the one Goffinet used for his fundraiser, are required to issue a 1099-K form if the transactions exceed $20,000.
Even though Goffinet said he gifted all of the money that he raised and has documents to back that up, since he is not a nonprofit, it is considered taxable income. So, he said he will likely pursue setting up a legal nonprofit to continue his efforts.
“People who contributed money in the past week generally included a letter recognizing the success of the fundraisers last year, so setting up a nonprofit seems like the logical next step," Goffinet said.
"I’ll work with Dawn, the CPA, to set it up and to be very transparent to people who have sent in money in the past week. Their gifts will go towards this new nonprofit unless they’d like them returned," he continued.