This wasn’t Rachel Bean’s first barnraiser.
For years, Bean, a former resident of the Twin Cities currently living in Central Minnesota, has helped her neighbors raise money for rent and other needs. So earlier this year, when she became aware of Stand with Minnesota’s Adopt a Rent program, she knew she wanted to help.
“That turned into, very literally, a full-time gig,” Bean says. Because she lives on disability and isn’t based in the Twin Cities, where most of the ICE chaos was centralized, she had the time to throw herself into fundraising rent for Minnesota families. “By the last week of February, I was like, ‘Alright, this is what I do now,’” she says.
She isn’t kidding: To date, she’s moved more than $73,825.
Minnesotans like Bean have redistributed thousands of dollars—in some cases, tens or hundreds of thousands—to neighbors in need in recent months. Everyday people are adopting rent to help support families who have lost their primary earner or have been unable to go to work throughout Operation Metro Surge.
But as the daughter of an accountant, one small fear has nagged at me since December: Are they going to owe taxes on that money?
It’s one thing for a nonprofit to collect funds. But what if you’re an individual, receiving donations from dozens and dozens of other individuals, and then distributing that money to a few families in need?
A surprise tax bill on $70K would be the stuff of nightmares, a horrible punishment for the crime of trying to do something good for the community. So I sat down with local tax experts to talk about the IRS-related implications of mutual aid.
The Good News
Liz Raimann first joined the tax world in 2011 and spent several years with a big accounting firm. Today, she works at the small, artist-focused local firm Fox Tax, where her clients include musicians, photographers, and creatives of all kinds—including Racket.
In February, when the Racket staff wanted to adopt a rent for a local family, we reached out to Raimann to ask about the logistics of running such a fundraiser through our publication’s accounts.
Her advice? Don’t do that.
“If that money moved through a business bank account, it’s really hard to prove to the IRS that money coming into a business is not income for that business,” Raimann says. “With fundraising efforts, I discourage people from moving that stuff through business accounts, because—I mean, there could be an argument that people are gifting money to a business, but that gets pretty hard to support, in my opinion.”
Ultimately, we did what Bean and countless other local folks have done since Operation Metro Surge started: We used personal Venmo and Paypal accounts to fundraise. Still, I didn’t fully understand the tax implications until I called Raimann up again last week. Would Venmo report the $5,000ish dollars we’d brought in as income to the IRS? And what about the people who were raising and redistributing tens of thousands of dollars?
Here’s the good news about crowdfunding for mutual aid efforts via platforms like Venmo or Paypal: These transactions are typically considered gifts, as they’re given without an expectation of receiving anything in return.
“And generally speaking, gifts are not taxable,” Raimann says.
There are some exceptions; for example, if an individual has gifted more than the annual limit of around $19,000 to another single individual, the gift-giver will have to file a gift tax return. But even if you gave a total of $19,000 to one individual—say, for a legal defense fund—the gift is often not taxable. There’s a $12 million lifetime exclusion on gifts and inheritance, Raimann explains, a figure most of us won’t reach in our lifetimes.
Now, this doesn’t mean you won’t hear from Venmo or Paypal at the end of the tax year. It’s still possible that you could receive a Form 1099-K, the tax document pertaining to payments received for sales of goods and services, even if the transactions were personal. The reporting threshold is pretty high, though; in 2025, Venmo and PayPal issued a 1099-K only to people whose payments for goods and services exceed $20,000 and who had 200+ separate transactions during the calendar year.
But Raimann adds that this can get tricky depending on how you typically use platforms like Venmo. Are you a self-employed person who accepts payment via Venmo, and who’s also using the app to collect donations for mutual aid causes? These commingling transaction types can create issues—another reason not to accept donations via business accounts.
“This all is super complicated, and it’s only getting more complicated … you’ve got different ways of money moving around that can create surprises—like tax forms at the end of the year,” Raimann says.
The Not-So-Good News
Now, that’s all just fine for the people who have been fundraising in this fairly simple fashion. Money comes in; money goes out; no goods and services are exchanged; no taxes should be owed.
But what about if you’ve been, for example, selling prints of your anti-ICE design, and then donating that money to a local org like the Minnesota Immigrant Rights Action Committee? Well… you might be in a bit more trouble come tax time, as local artist and writer Andy Sturdevant discovered when he thought about selling art to raise funds earlier this year.
“I got more than a few steps into that and was like, ‘Oh, actually I don’t really understand if this is revenue, or if this is donations, or how this should be treated,’” says Sturdevant, who’s also one half of Racket’s Brunch Buds duo. He contacted his tax preparer, who had a fairly simple answer: “Well, yeah, it’s revenue, and you’re going to have to pay taxes on it.”
What does that mean for artists who want to use their work to raise money for local orgs or individuals? Sturdevant sat down with a handful of other local accountants and attorneys, eventually compiling all of their wisdom into Proceeds Will Go To…: A Brief Guide to Selling Art and Merch to Raise Money for Direct Support and Mutual Aid, which is available to download for free via his publishing imprint, Birchwood Palace Industries.
“If you want your artwork to go toward raising money for a cause, whether that’s a nonprofit or a GoFundMe or an informal mutual aid network, when you get down to it, you really only have a few options,” he says. For most individuals, the big ones are…
- “Sell it yourself, and then do whatever you want with the money you make from that.”
- “Make somebody else sell it—and the somebody else, in that case, is either a nonprofit or another individual that is willing to take on the tax liability.”
- “Give the work away, remove any kind of commercial transaction from it, and encourage people, in the strongest terms possible, to give their money directly to the recipient.”
Each of these methods has its own benefits and drawbacks. Maybe you feel fine about giving the work away and having people donate directly to your mutual aid fund or nonprofit of choice, absolving you of any tax burden, even if some folks take a print and don’t end up making a donation. Maybe you don’t mind selling the art yourself and paying taxes on those sales because you only anticipate making a few hundred bucks.
But as Sturdevant explains, the right combination of social media attention and publicity and luck can mean huge amounts of money are coming in—“And you can get really fucked if you aren’t kind of careful about how you structure things.”
Now, it’s really none of our business what you do come tax time next year; your filing is between you, your god, and your TurboTax account. But one surprising takeaway from Proceeds Will Go To… is that the experts absolutely do not recommend hosting raffles.
“Though the spirit of this publication is not to tell you what to do or not do, in this case we’ll say it plainly: Please don’t do this if you can avoid it,” Sturdevant writes.
They may seem more informal, but chance-based fund drives—“for every $5 you Venmo me, you’ll receive one entry to win a hand-knit sweater”—actually carry graver risks than an unanticipated tax bill because they move you into the realm of gambling regulation. That means state gaming laws, and possibly criminal statutes, could apply, resulting in a fine or even a misdemeanor charge.
“Gaming regulations are often enforced on a complaint basis,” Sturdevant writes. “Running a raffle, even on a small scale, increases the risk that a well-intentioned fundraiser becomes an easy target for some right-wing crank on the internet waging low-intensity guerilla lawfare. It may also put the entities you’re raising money for at risk.”
Meeting the Ongoing Need
That $73,825 figure Rachel Bean has raised to help local families stay in their homes? She tells me she hadn’t added up the total until recently, when I reached out on Bluesky to ask about her barnraising efforts.
“I got scared when you were like, ‘Are you worried about getting a tax bill?’ Frankly, I had not been, until you messaged me about it,’” she laughs.
Bean stayed up all night putting together a spreadsheet of the money that had come in and gone back out over the last several months so that she’d have a document with all the numbers in one place. To her relief, she had sent out more money than she had received, and better yet, the two totals were within about $50 of each other.
Liz Raimann with Fox Tax says that’s one of the best things you can do to protect yourself in the event that Venmo or Paypal sends you a 1099-K—which does happen, even if the money you received wasn’t for goods or services. You can report that you received a 1099-K in error, but in that case, you're going to need good records.
“One thing for people to keep in mind is that if the IRS audits you, you are supposed to have written documentation that a gift is a gift, which, you know, can be tricky, especially when people are collecting a lot of small amounts through Venmo,” she says. Her advice, if you’re collecting money and then gifting it to someone else, is to have some sort of written documentation of dates and donation totals.
“It’s hard to go back and recreate those records, and really, the IRS requires that you have contemporaneous documentation, so it should be occurring at the time when the transaction is happening, not recreated later,” Raimann adds.
Kaarin Kontio Evens, a CPA with Lottsa Tax in south Minneapolis, agrees. In February, Kontio Evens actually put out a one sheet, “Tax Implications of Mutual Aid,” intended to help individuals who have collected donations for neighbors understand the tax landscape.
Kontio Evens says that the best time to start thinking about this stuff is right now. There’s no way to know if you’ll be audited, and if the totals in your Venmo accounts are high enough, you might receive a 1099-K. (In her explainer, she recommends logging in to your account after January 31 of next year to see if you got one; the forms are rarely mailed.)
“I think people tend to feel a lot of urgency to jump into action, which I understand. And then they think, ‘I’m going to deal with this next year when I have to file my taxes,’” Kontio Evens says. “My recommendation is, if it starts to be big, ask questions as you realize it’s getting big, not way after it’s already become big.”
“It will be a lot easier for someone like me to help you get this set up and organized well if we’re in the conversion before you start doing things,” she continues.
Of course, the needs are often urgent, and waiting until you have all the information isn’t always an option. Earlier this week, for example, Bean helped pay rent for someone who had eviction court the following day.
The Stand With Minnesota Adopt a Rent system isn’t collecting a lot of information about the immigrant families it’s supporting for obvious reasons, but the stories Bean does know are hard to hear. A family whose senior dog died while they were away in hiding. Whole families living in someone else’s one-bedroom apartment for months at a time. People who didn’t think the federal invasion would go on for so long, and who are only now coming forward to say that they haven’t paid rent in months.
So maybe her approach to the whole tax thing was imperfect. But she wouldn't have done it any other way.
“The dollar amounts are so big, but they also don’t capture the serious emotional toll,” Bean says. “Whatever tax bill that I could conceivably get … that is nothing compared to what any one of these families has already been through.”
