A couple in our community hold a private fundraising event each year. They ask local businesses for donations in the form of vouchers to raffle off. Attendees buy tickets with cash and this covers the days activity, food and alcohol. A cheque is then presented by the couple through their business name to the recipient. The couple then claims the amount donated on their taxes. Is this legal?

Sarah. Hi. Thanks for your question. I am going to answer from a commoners viewpoint, as I note no on else has yet provided a response.
The concept of a business writing a cheque as a donation to a registered organisation and claiming a deduction would in itself not be a problem.
The issue lies in the aspect that they are collecting money from the public and then serving (selling) alcohol. To collect money from the public under the pretence of a community fund raiser would normally require to be registered with the designated organisation. This would mean that a receipt is to be issued to the person paying, for them to claim for there donation (not for the organiser to claim all deductions).
By collecting money in return for the provision of alcohol requires you to hold a liquor licence of some form.
I would suggest that several laws / regulations are being breached here. It would only take someone to complain to potentially have a very sticky investigation being commenced.
Would be good to have some input from the Taxation experts on the panel in this regard.
Should you have any needs on the home financing front then please give me a call
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

Hi Sarah,
Whilst there are quite a number of rules and regulations involved in this activity, there is nothing to say that it is illegal.
In NSW they potentially are required to register their intention to appeal for funds and donations, have a food service certificate and a liquor license among the rules that apply.
In terms of claiming the donation within their business or personal taxes, that may be a stretch of the provisions of the tax system but that would be a matter for them and their accountant to interpret
Best regards
Scott