With the recent tax related charges against the Trump organization for various fringe benefits they have been giving top employees I have seen some counter claims I have questions about. The big one I have been seeing is that some are claiming that the act of paying for the school of various employees is charitable giving.
My question is twofold, could this be considered charitable donations and if not is there any kind of donation that can be given to an employee that could?
Payments made from an employer to an employee, or for the benefit of an employee, are not charitable gifts. These payments are compensation.
Payments made to a specific individual, without the intermediary role of a non-profit that provides a scholarship, are not entitled to the charitable deduction for income tax purposes, or for estate tax purposes, even if the intent is charitable. There is an exemption from gift taxation for an individual who is paying the tuition of an individual when it is not compensation.
The charitable gift argument to excuse this tax conduct is not credible, and probably qualifies as frivolous.
A still extremely weak, but non-frivolous argument might be that the payments were for advertising, but only if it was widely publicized that they were made for the benefit of employees who couldn't afford to send their kids to college (which this case did not involve).
You can label it a chicken if you like but you won’t fool anyone who knows about ducks.
A charitable donation comes with no expectation of a quid-pro-quo. Paying a school in return for them educating someone is not charity.
