Games of chance usually have two sides to the coin. There are the participants who usually pay (but not in this case), and the winner(s) (who we will defintely have in this case).
While there may not be any upfront payments, it is still a game of chance with the winners receiving something of value. Therefore, it is my humble opinion that all IRS forms, including 1099s, must be processed.
Advancement Solutions Consulting Group
"Transforming the base of the pyramid."
1817 Woodburn Road
Durham, NC 27705-5724
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From: Fund raising services technical discussion [mailto:[log in to unmask]] On Behalf Of John Carr
Sent: Wednesday, February 13, 2008 3:07 PM
To: [log in to unmask]
Subject: [FUNDSVCS] Is it a Raffle?
A friend emailed this question to me, and I am not sure I know the
answer. Any thoughts would be appreciated:
Please share your thoughts on the following scenarios. Our headmaster
wishes to hold a drawing at an upcoming school event for reduced
($5,000 credit) for three VERY LUCKY people. As this is not a raffle
tickets are not sold and it is not a fundraiser - I am unsure of
governing regulations. Would the winner(s) be required to sign a W9
have this declared as income? Would the school have to withhold
as you must on raffle cash prizes of $5,000 or more? Any input you
provide will be greatly appreciated.
FYI, a subsequent phone call to her provided some additional
information. The event is a capital campaign kick off, and the reason
for offering the tuition credits is as an incentive to attend. Entrants
are not required to buy a ticket, and the event itself is free.
Entrants do have to be present to win.
I am not sure how to respond. Since there is no entry fee/ticket to
purchase, is it a game of chance? Does requiring attendance make it
cross over to the status of raffle/game of chance? Since it is a
tuition credit, would the credit just be financial aid and not
Director of Development
Savannah Country Day School
824 Stillwood Drive
Savannah, GA 31419
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