Minnesota Cities Magazine
More from Mar-Apr 2018 issue

Ask LMC: Are Donations to a City Tax-Deductible?

Donations to a City
Q: If someone donates money to our city, can the person claim a deduction for that on his or her income tax?

Are Donations to a City Tax-Deductible?LMC: An organization or individual who makes a gift or contributes money to a city can deduct the value of the gift or donation from federal income taxes. However, cities should encourage donors to consult a tax expert to appropriately verify the charitable contribution deduction.

Cities are not 501©(3) organizations and do not qualify as tax-exempt organizations under that section of federal tax code. Cities are, however, exempt from federal income tax under a different section of the federal tax code because the U.S. Supreme Court has repeatedly found that the federal government cannot tax the income of states or their local government entities. In addition, under federal tax law cities can accept charitable contributions as long as the money or gift donated is used exclusively for public purposes. Cities should track each donation to be sure it meets this standard.

Also, as a special service to government entities, the IRS will issue a “governmental information letter” that describes the exemption from federal income tax and cites applicable Internal Revenue Code sections pertaining to deductible contributions and income exclusion. Most donors will accept the governmental information letter as the documentation required to prove the tax deduction. Government entities can request a letter by calling the IRS at (877) 829-5500.

Answered by Research Attorney Amber Eisenschenk: aeisenschenk@lmc.org

Hiring
Q: Do we have to ask the exact same questions of all the candidates interviewing for the same job? Can we ask follow-up questions?

LMC: Interviewing serves the purpose of gathering job-related information about the candidate to help in selecting the most appropriate person for the position, so it’s important the interview is thorough and unbiased. Under Equal Employment Opportunity Commission guidelines, providing a uniform selection process that treats all applicants equally is the best way to avoid bias and discrimination. Therefore, as a general rule, you should ask all applicants the same questions. However, you may ask appropriate follow-up questions related to the initial question asked, especially if the candidate does not fully address your question and you need more information to assess their response. The League has a new model guide you can customize and hand out to interview panelists to help train them on appropriate interviewing techniques. Download the model guide at www.lmc.org/interviewpanel.

Answered by Human Resources Director Laura Kushner: lkushner@lmc.org

Cybersecurity (Part 2 of 4)
Q: I work in a small city and do not have technical support staff. What are some things I can do to keep our computer systems more secure?

CybersecurityLMC: There are three low-cost actions all cities should take. They involve passwords, updates, and backups. Passwords were covered in the January- February 2018 issue of Minnesota Cities. We’ll cover updates now.

When you receive a pop-up on your computer telling you that there are updates available, it’s easy to skip because they can take up a few minutes of your time, and may not seem that important. This is a mistake that keeps the door open for hackers to access private information, putting your city at risk for identity theft, loss of money, credit, and more.

You may have heard of the recent Equifax data breach, where 143 million Americans were potentially affected. Social Security Numbers, birth dates, and home addresses were exposed. The hackers could access Equifax data through a known vulnerability in a web application. A fix for this security hole was available two months before the breach, but Equifax failed to update its software.

Got questions for LMC?
Send your questions to choffacker@lmc.orgMany software applications have options to update automatically. Take advantage of this. It also helps to create an inventory of your software and use that list to check for updates monthly. For example, Microsoft typically releases updates every month. You can learn about updates by visiting the software’s website. Consider applying updates no sooner than three days after the release, to ensure the update itself does not cause issues. To learn more, see the LMC information memo at www.lmc.org/cybersecurity.

Answered by Chief Information Officer Melissa Reeder: mreeder@lmc.org

Read the Mar-Apr 2018 issue of Minnesota Cities magazine

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