If you regularly claim deductions for donations, you may need to update your tax record keeping practices --- the Internal Revenue Service (IRS) issued final regulations this summer concerning the correct way to substantiate any charitable contributions you wish to deduct. Under Section 170(f)(8), for contributions of $250 or more, the recipient organization should provide you a receipt at the time of the contribution that shows:
November kicks off the season of giving, and the donations you make to your favorite charities may also provide you some tax benefits. However, there are some guidelines you should keep in mind as you write those checks.
The Internal Revenue Service (IRS) has issued a warning about possible fake charity scams related to the effects of Hurricane Harvey. Taxpayers should be sure the charities they want to support are recognized by the government to accept donations. Don't let your compassion get the best of you - be careful who you send your money and information. The IRS offers the following tips to help you protect your interests while also supporting causes you care about:
On November 17, 2014, the IRS released suggestions to insure successful year-end charitable giving. Please see below for six tips from the IRS, and contact our office at (916) 488-8501 if you have any questions.
Yesterday, the Tax Court issued a 63 page opinion finding that the taxpayers were not entitled to a $499,000 charitable contribution deduction for the donation of an apartment building to Volunteers for America because the taxpayers failed to obtain a qualified appraisal for the building. Alli v. Commissioner, T.C. Memo. 2014-15. This case highlights the importance of meeting all of the substantiation requirements for charitable contribution deductions. Even where there is no dispute that a taxpayer has donated valuable property, a failure to follow the appraisal rules in many cases precludes the taxpayer from taking any deduction at all. In the Alli case, there were numerous substantiation problems that resulted in a complete disallowance of the taxpayers' claimed deduction.
In addition to achieving philanthropic goals, many people make charitable donations at the end of the year in order to maximize income tax benefits. To make sure your charitable donation accomplishes both charitable and tax-savings benefits, here are few considerations to keep in mind as you make your year-end donations:
In Pollard v. Commissioner TC Memo 2013-38, the U.S. Tax Court recently denied a taxpayers' deduction for the donation of a conservation easement where the taxpayer granted the easement pursuant to negotiations with a local zoning authority for approval of a subdivision exemption.
The IRS deadline for filing your tax return for 2011 is rapidly approaching, which means more people are becoming concerned about receiving that dreaded audit. Recently, we mentioned how the IRS is increasingly turning to so-called unreal audits ("Audits may not be commonplace, but they are not rare either," Feb. 23) in which the agency informs taxpayers of errors in their returns by way of letter. Yet, no matter the type of audit involved, there are some things California taxpayers can do to reduce their chances of having to deal too closely with the IRS.