Money held up for NY firefighters' families affected by Christmas Eve tragedy

Tax codes prevent a not-for-profit group from giving donations to an individual or family without steep penalties

WEST WEBSTER, N.Y. — Federal tax law is keeping a volunteer fire association from giving the nearly $1 million in donations to the families affected by an ambush shooting last Christmas Eve. Two firefighters were killed at the scene; two others were injured.

WHEC reported that the West Webster Volunteer Fireman’s Association raised about $900,000 right after the Christmas Eve tragedy to be split between the four families of the fallen and injured heroes.

The money is supposed to go to the families of Mike Chiapperini and Tomasz Kaczowka, who paid the ultimate sacrifice that morning, and also to Ted Scardino and Joseph Hofstetter, who were injured, according to the report.

However, tax codes prevent a not-for-profit group from giving donations to an individual or family, according to the report.

“We've got all this money that people gave to us, in good faith, expecting us to give it to the families and that's what we want to do with it,” said Ken Smith, President of West Webster Volunteer Fireman’s Association. “We don't want to keep it to hold on to it, we want to give it to the families.”

Officials did not know federal law would prevent them as a nonprofit from giving the money out, according to the report.

“We would pay a penalty, we stand a chance to lose our nonprofit status if we do that, so we are not going to do that,” Smith said.

Brennan Redmond, Brighton Securities, said, “If it gets paid out to the families, it will be considered as wages and be taxed as such. There are two firefighters where the firefighters passed away, so let's presume it is split 50% each that would instantly knock them to the highest tax bracket both in state and federal which would probably mean about 45% of that would go away to government taxes.”

Smith said he won’t be able to do anything unless the government steps in, according to the report.

Sen. Chuck Schumer (D-NY) said, “We are working with the IRS and even will introduce an amendment with in an upcoming tax bill to make sure that this money is tax exempt."

Schumer says hopefully by October, Washington and the IRS will straighten out the issues the association is facing, according to the report.

“Hopefully, we can get people to think with their hearts and not their political minds. And move this along,” Smith said.

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