BEST KEPT SECRET OF THE CENTURY: Laws our Government Agency Leaders don’t know, or are purposely keeping from the Taxpayers!
By Alexis Stuart, the Credit Whisperer®
Question: can an individual donate to Social Security, Medicare, Medicaid and/or The Department of Defense and write it off as a tax-deductible charitable gift on their taxes?
Can you guess which government agency still refuses to provide a written answer?
Can you guess which government agency provided the correct answer?
Can you guess why any government agency would not want taxpayers to know the Best Kept Secret I have discovered?
Can you guess why none of our government officials or any current presidential candidates are suggesting this idea?
Uncovering this “BEST KEPT SECRET OF THE CENTURY” all started in 2006, with an idea I had to help The Social Security Funds. I first thought, “Why not donate to Social Security?” Then, I thought, I could start a nonprofit and get people to donate to our mission to help Social Security. We could use the donations to help people buy or start businesses, create jobs and at the same time contribute to the economy and increase revenue to the Social Security Funds. In a few years our nonprofit could donate to Social Security Funds when it is scheduled to run out of money. As a Real Estate Broker and business owner, always looking for another good business to buy, I would follow the progress of small businesses for sale on the Multiple Listing Service. Many times, if the owners could not sell the business, they would end up closing. I wanted to help employees build their credit power so they could buy the business from their boss, keep it alive and keep all of the employees working.
This raised the question, “can a nonprofit donate to social security?” Better yet, “can an individual donate to social security and write it off as a tax-deductible charitable gift on their taxes?”
To find the answer I called The Social Security Administration Commissioner’s office on February 2, 2006 and was told by the secretary that she had never been asked that questions before. I was put on hold while she tried to find the answer. The secretary returned and told me she could not find anyone that knew the answer. Because no one in the office knew if donations were allowed, or if an individual could write them off on their taxes, she told me to write a letter to the Social Security Administration Commissioner and pose the question.
It took three months to get an answer, but I received a letter dated 5/3/06 from Annie White, Associate Commissioner of Social Security Administration stating “You may be interested to know that section 201(i)(1) of the Social Security Act currently provides for tax-deductible gifts to the Social Security trust funds”. The entire letter is available online at www.creditwhisperer.com/solution.htm
I did form a nonprofit organization; Credit Power Educational Foundation, Inc., and part of our mission is to “STRENGTHEN our national economy and Social Security Fund”.
After watching many news reports on how the Department of Defense is the main purpose of the Federal Government and how Medicare and Medicaid were also running out of funds, I decided to ask them the same question I asked the Social Security Administration.
On March 14, 2011, I first called the Medicare and Medicaid office and the female who answered the phone said she had never been asked that question before. She put me on hold and then told me she could not find anyone that knew the answer and they would need to have someone call me back. I did not get a return call.
Next on March 14, 2011, I called the Department of Defense, and just like my call to the Social Security Administration, Medicare and Medicaid, was told by the Public Communication Responder for the Department of Defense that he did not know the answer so he put me on hold while he asked someone else. He returned and said they did not know if donations were allowed or if you could write them off on your taxes, so he put in a written request for an answer.
I did receive an email confirming my question and the following is a portion of the answer:
“Unfortunately the Department of Defense does not accept monetary donations but we thank you for your interest and support. We encourage you to visit our Community Relations website which lists a variety of pre-screened charitable organizations focused on supporting the military community. http://www.ourmilitary.mil/help.shtml”
Question Reference #110314-000075
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Topic Level 1: Department of Defense
Topic Level 2: Policy and Programs
Date Created: 03/14/2011 02:06 PM
Last Updated: 03/15/2011 04:14 PM
Status: Solved
[---001:001561:14959---]
Because of other business activities I did not get back to my quest for an answer with Medicare and Medicaid until May 19, 2011. I again called trying to get an answer to my questions. I was told to send a letter. I called back and asked for the Director of Medicare and Medicaid and was transferred to Danette Greenwood, the personal secretary of Dr. Donald M. Berwick. I asked Danette “Can an individual donate to the Medicare or Medicaid Trust Fund and write it off as a tax-deductible charitable gift on their taxes? Danette was very quick to answer “NO!”
I asked Danette if I could speak to Dr. Donald M. Berwick and she said “I handle all of his calls”. I asked if they do not accept donations could Dr. Berwick suggest that Congress, the Senate and President Barack Obama change the law. Danette suggested I contact my congressman to suggest a change in the law. I told Danette that I had already written to many congressmen and Senators and only received a few automated responses. I suggested that Dr. Berwick has connections it would make more sense for him to bring it to the attention of the IRS, Congress, the Senate and President Barack Obama that we need to change the law so individuals can donate to the Medicare and Medicaid funds and write it off as a tax-deductible charitable gift on their taxes.
Danette finally agreed and told me to email my idea in and she would forward it to Dr. Berwick. I sent an email on May 19, 2011. I did not get an answer, so I called Danette on June 3, 2011 and asked if she forwarded the email to Dr. Berwick. Danette said she forwarded my email to a group of people who would be responding to my email. Danette said she would check to see if any progress had been made in getting me an answer. I asked Danette if she would please put the answer in writing. Danette said she could not put her verbal “no” answer to my “can you donate question” in writing, but she would send me an email confirming that she received my email.
I called Danette again on June 6, 2011 at 1:14pm
A man answered phone: “OFFICE OF THE ADMINISTRATOR”. He asked what it was concerning and put me on hold, came back and told me Danette had just gone into a meeting and he said he left a message at her desk.
I asked for his name and he refused to give it. He said it was none of my business and he did not want to be involved in the middle when my business is with Danette.
I then asked for Dr. Berwick and the man who refused to give me his name said he would never forward me directly to him, that Danette takes care of his schedule.
I called back on June 7, 2011 at 12:14 p.m.
I was able to speak to Danette; she said they would be getting back to me next Monday on June 13th.
Danette still would not send me an email with the verbal “no” answer to my “can you donate question”. She said the other group of people will get back to me.
Danette agreed to send me a confirmation with a time line to get an answer to my question. She also agreed to send me an email after she called the other people to push them for an answer and let me know when I might expect an answer.
I called Danette again on June 8, 2011 at 11:55 a.m. I think I spoke to the same man with no name. He said Danette was in a meeting and she already had my message from before. I asked his name and he refused, saying, “I do not give out my name to anyone outside CMS”.
On June 8, 2011 at 1:21 p.m., I called Danette again and spoke to the man with no name. He said “Danette is busy, it is ongoing”. He refused to let me hold for Danette. I asked if Danette was avoiding me. He claimed Danette was not avoiding me and suggested that I email her. I told him I was a taxpayer and wanted to hold. He said “That is not going to happen”, and hung up on me.
I sent Danette another email and received a response.
Wed, Jun 8, 2011 at 1:47 PM
RE: Response requested
Hi Alexis,
I will follow up with the component today to see exactly how long they will be in getting you an answer and get back to you as soon as possible.
Regards,
Danette
To see the email go to www.creditwhisperer.com/solution.htm
I still do not have an answer as of July 12, 2011 from Danette, Dr. Berwick, or the “component”.
On June 30, 2011 Danette finally told me to contact Dianne Heffron, the staffer working on an answer. It took six days for me to finally connect with Dianne Heffron who is the Director of Financial Management Group of the CMSO
Dianne told me she had not received my email. She was able to find my email while I was on the phone. I refreshed her memory as to the fact Danette Greenwood had forwarded my letter and emails to her. Dianne said she was still working on an answer for me. So far she believed that I could donate to Medicaid on the state level, but not to their department. She suggested I contact Toby Douglass, the Secretary of the California Department of Health. She said they only match the state payments. (Another wrong answer)
Dianne said she was still doing research on the Medicare side. She did not know who would even be able to take the donation. She was sure that her department not able to take any donations. I asked if she could put her answer in writing. Dianne said since the letter was addressed to the Director, Dr. Donald M. Berwick, she could not answer my letter or questions in writing. Dianne said Dr. Donald M. Berwick would need to down-grade the response to her. She said that could take two weeks to get the down-grade.
I suggested that I send another letter addressed to her so she could answer it. Dianne said that would work, so I re-sent the letter, and another email, addressed to her on July 6, 2011.
I phoned Dianne Heffron on July 12, 2011, but she did not answer, so I left a message. I still do not have an answer.
I sent a letter to Dr. Berwick on June 15, 2011 informing him of the additional information I had uncovered concerning donating to the Medicare and Medicaid Trust. A copy of the letter is available at www.creditwhisperer.com/solution.htm
Most people are unaware of this option, including Ms Greenwood.
I continued my research after I was told by Danette Greenwood that an individual cannot donate to the Medicare or Medicaid Trust Fund and write it off as a tax-deductible charitable gift on their taxes.
It seems that contrary to the information I was given by Danette, an individual actually can donate to Medicare and Medicaid and write it off as a tax-deductible charitable gift on their taxes.
I contacted the IRS and spoke to Jacob, i.d. #1054973526.
Jacob put me on hold while he searched for the answer to my question, which was:
“Can an individual donate to Social Security, Medicare, Medicaid and/or The Department of Defense and write it off as a tax-deductible charitable gift on their taxes?”
Jacob told me to look in Pub 78 to find organizations that are currently tax exempt. He said Pub 78 lists most organizations but does not include all organizations and it does not list Federal, State and Local government organizations as they are not required to file for tax exempt status.
I asked Jacob for more details of how donations to a government agency can be written off on your taxes. Jacob had to put me on hold again to search for additional information. Jacob instructed me to search for Pub 526 on their website and to look at Table 1, page 2. Table 1 defines “Deductible as Charitable Contributions” for “Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt)”.
Here is the link for pub 526: http://www.irs.gov/pub/irs-pdf/p526.pdf
I asked for additional information to clarify the terminology “public purpose”.
Jacob was unable to answer my question and transferred me to the Tax Exempt and Government Entities Division of the IRS. I spoke to Miss Lee, i.d. # 1001181273.
Miss Lee was also unable to answer my question and needed to put me on hold to find the answer: She did not find anything to further clarify the terminology “public purpose”.
Miss Lee said, Federal, State and Local government organizations are not required to apply for formal recognition. She also said any government organization could request an Affirmation Letter to show that donors could donate to their organization and write it off on the donor’s taxes.
Miss Lee also suggested that I look at Pub 557, page 30, which defines what a “government unit” includes.
Here is the link for pub 557: http://www.irs.gov/pub/irs-pdf/p557.pdf
I asked Miss Lee if I could get an Affirmation Letter to prove I could donate to a government organization. She said if I could give her an address, she would search to verify if the government organization was in their system. If she found them in the system she could then send me an Affirmation Letter.
Because I had already spent 1 hour and 45 minutes to get to this point with the IRS, I asked if she could hold while I gathered the addresses for Social Security, Medicare, Medicaid and the Department of Defense.
As I found each address, Miss Lee was able to first confirm the Social Security
Administration, then Medicare and Medicaid, but was not able to confirm the Department of Defense.
Miss Lee said she would send me separate Affirmation Letters for the Social Security Administration, Medicare and Medicaid, that confirms that I can make a charitable donation. I have received the two Affirmation Letters and a copy is available at www.creditwhisperer.com/solution.htm
I asked if I could speak to a supervisor as Miss Lee could not explain why she could not find the Department of Defense in their system.
Two days later a supervisor, Mr. Cordell, i.d. # 1000196899, returned my call. Mr. Cordell said, “The Taxability of Donations account for the Department of Defense was not active”. He said if I could contact someone at the Department of Defense and ask them to call (877) 829-5500 they would be able to verify and reactivate their account by phone.
Mr. Cordell said because government organizations are not required to file a 990, their account can go inactive. Once the Department of Defense calls the IRS, they will be able to verify the account and have it placed back into an active status. After that, I will be able to request an Affirmation Letter for the Department of Defense.
You would think if the head of Social Security, Medicare and Medicaid and the Department of Defense and any other governmental unit could raise extra money via a tax deductable donation they would be talking about it and encouraging as many people as possible. Isn’t this solution better than relying on taxes being raised.
It does raise the question, how to control the spending? We need to get control of the spending and we need reform. If our government officials were more responsible in how they spend our tax dollars, then the public might be more willing to donate.
It is understood that we need to reform Social Security, Medicare and Medicaid and the Department of Defense. We need to eliminate the fraud and keep our officials from using the funds for unauthorized purposes. The wealthy would be more willing to donate if they had more confidence that the government would protect the funds, and if a firm plan was in place for reforming the systems. The reform is needed no matter if we voluntarily donate or the money is taken from us as a tax.
I have been told by The Social Security Administration, The Medicare Office and The Department of Defense that no one has ever asked if an individual can donate to their organizations and write it off as a tax-deductible charitable gift on the donor’s taxes.
Once I discovered government employees didn’t have a clue, to prove my point this is the “BEST KEPT SECRET OF THE CENTURY”, I decided to call a few CPA’s in several states and posed the same question. Surely, they will know. I found that most CPA’s did not have a clue. The CPA’s also did not have any clients that had ever donated to Social Security, Medicare, Medicaid or the Department of Defense or had ever asked if they could. The nicest and most knowledgeable CPA I spoke to was George Williams in Allen, Texas. Thank you George, for your kind words and interest in my quest.
So why do we have laws to allow us to make a charitable donation, yet our government officials, employees and CPA’s don’t know about it?
Why has no one educated the public about this solution to help the entire country?
I feel our country is more important than any embarrassment any government official may fear. Our government officials need to start making the public aware.
Recap as to knowledge of the tax law:
The Social Security Administration has been aware that an individual can donate and write it off as a tax deductible contribution since May 3, 2006 and has not notified the public.
Danette Greenwood gave me an incorrect verbal answer. Danette is the personal secretary to Dr. Donald M. Berwick, the director of Medicare and Medicaid and is still unaware of the law unless Dr. Berwick has read my letter dated June 15, 2011. Dianne Heffron the Director of Financial Management Group of the CMSO
is working on a written answer, but the verbal answer I have received from her is incorrect. I finally received an email response from Danette Greenwood on July 26, 2011 citing IRS Publication 526 after I pointed out this publication in my letter to Dr. Berwick on June 15, 2011.
I sent a letter to Dr. Berwick on July 27, 2011 asking the following:
Now that Peter M. Kelchner, CPA, at CMS, has researched Publication 526 and recognized that the Federal government is considered as a qualified organization for charitable purposes, I again ask the following questions:
- Will you please set up a donation page on the website for both Medicare and Medicaid?
- Can you bring this matter to the attention of the public, and the employees of the Department of Health and Human Services? You can even go further and ask the public to voluntarily donate to Medicare and Medicaid instead of relying on their taxes being raised.
- Can you start an ongoing educational campaign to bring Publication 526 and Section 170(c)(1) to the forefront, so people will realize there is the possibility to donate to Medicare and Medicaid?
On August 20, 2011, I received a letter dated August 15, 2011, from Joseph Dion, Lead Ethics Administrator with the Centers for Medicare & Medicaid Services (CMS). Obviously he did not understand the questions I posed to Dr. Berwick in my letter dated July 27, 2011.
As of August 22, 2011, I have not received an answer from Dr. Berwick to my letter dated July 27, 2011.
Department of Defense sent me a response which was incorrect and may still be unaware unless they read my email dated June 13, 2011. The DOD still needs to contact the IRS at (877) 829-5500 to reactivate their account. I have made multiple calls to the Department of Defense. Commander Kathleen Kessler told me to send a letter to the Secretary of Defense. She told me no one has the authority to connect me to someone that can call the IRS to reactivate their account. I sent a letter on 7/8/11 to Leon Panetta, the Secretary of Defense. As of August 17, 2011, I have not received an answer from Leon Panetta to my letter dated July 8, 2011. I phoned the IRS to ask for an Affirmation Letter on August 16, 2011 and spoke with Miss Lee, i.d. # 1001181273 again. Miss Lee told me the Department of Defense is still not showing as an active government unit. Miss Lee submitted a referral asking for a letter referencing the Department of Defense as a government unit as tax deductable. She said it may take 30 days to get a response.
All documents can be viewed at www.creditwhisperer.com/solution.htm
I am just one of the little people. I need the help of government officials, media, teachers and the public to spread the word. You can all make a difference.
Alexis Stuart, the Credit Whisperer®,
is the author of “CAPITALIZE on CREDIT POWER”
This book will build a better country!
You can purchase the book at www.capitalizeoncreditpower.com
or www.creditwhisperer.com
© 2011
