>>4545408Just chiming in after asking my accountant friend about this, who is also an enrolled agent, which is someone who works directly on behalf of taxpayers when they speak with the IRS. Nothing states that you have to be shown receipts for donating to a project like this. The fact that they have posted actual finished photos is enough to satisfy the question of whether or not they produced something with the money brought in.
On the tax evasion issue, he said the chances it would be looked into are remote, and the only thing that would happen from that is they would be asked to show receipts to the IRS via an audit. Even not having receipts for everything, there is enough documented evidence of their expenses via video that it would be easy to prove that actual money was spent on the production of the photos.
Failure to report a profit and pay the taxes on that profit would be tax evasion (i.e. evading the tax on the actual profit). He said that since they are also putting in their own money, it would be very easy to show that they spent more on the project than the funds they took in, and that all of the expenses, including most of the meals, would be tax deductible. Their project would be easy to show as operating as a loss, not a profit.
So in this case, if they were called in on account of taking donations for the project, the end result is that they'd walk out of the audit with a tax deduction, which is the exact opposite effect and a major reason the IRS would just ignore the case from the start.