Just curious about one thing..do the people who receive these funds from places like KickStarter or GoFundMe have to report them as income ( and pay taxes)? Will Melissa get an IRS audit next year?
I know enough about tax law to do my own (which are pretty simple) and to otherwise be dangerous :-). So this is what I think happens and should not be taken as definitive or as advice. FWIW.
However I think these donations are counted as individual gifts. Which means gift tax rules apply and so long as there isn’t an individual donation above $10k all the money transfers to them tax free. And the taxes only kick in for individual donations above $10k.
But someone with more knowlege of tax law should definitely feel free to correct me.
I will add that with a take above $500k (which is what this should end up being from the looks of it) they should be able to hire a tax attorney with the money to figure it out and do the paperwork, pay any applicable taxes and still comfortably pay off the fine.