alt Hacker NewsThat’s not true. If a donation is tax deductible that’s just between the IRS, the recipient and the donor. The payment processor, banks, etc don’t do anything special.
That’s not true. If a donation is tax deductible that’s just between the IRS, the recipient and the donor. The payment processor, banks, etc don’t do anything special.
So I'm only a layperson and don't know what is strictly legally required, but my understanding (based on reading/third-hand information) is that payment processors do in practice end up with more work to do for this, whatever the reason. Quoting from [1]:
> Nonprofits have strict tax regulations when accepting donations. The more a payment processing system can assist with these regulations, the better for you and your donors. For instance, donors need to receive specific documentation for tax-deductible contributions, such as donation receipts. Additionally, different types of donations may involve different tax considerations for the donor and the organization. Nonprofits also have to consider any state and federal regulations regarding their charitable solicitation and fundraising activities, which may vary depending on location and activities.
And there's of course also exemption from sales tax which they have to handle too.
[1] https://www.subsplash.com/blog/nonprofit-payment-processing#...