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Taxpayers Don’t Comply With Reporting Requirements for Noncash Charitable Contributions | Tax Tip of the Week | No. 191 March 27, 2013

Posted by bradstreetblogger in : Tax Tip, Taxes, Taxes, Uncategorized , trackback

Are You in Compliance?

About 60% of taxpayers who claim large-dollar noncash charitable contributions on their returns may not be complying with Federal reporting requirements, according to a new report by the Treasury Inspector General for Tax Administration (TIGTA). 

TIGTA’s report found that the IRS is not ensuring that taxpayers are complying with reporting requirements for claiming noncash charitable contributions. An estimated 273,000 taxpayers claimed about $3.8 billion in potentially erroneous noncash charitable contributions in Tax Year 2010, which resulted in an estimated $1.1 billion reduction in tax. 

“Taxpayers can generally deduct noncash charitable contributions made to qualifying organizations during the tax year on their Federal tax returns,” said J. Russell George, Treasury Inspector General for Tax Administration. “However, taxpayers who do not comply with the reporting requirements for noncash contributions could be incorrectly reducing their tax liabilities and receiving tax refunds to which they are not entitled,” he added. 

Taxpayers who donate motor vehicles must attach a Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, to their tax returns. However, the IRS is still not effectively identifying taxpayers who are not complying with reporting requirements for donations of motor vehicles. 

This is an easy target for the IRS to take aim—make sure you have your records!

As always, give us a call with any questions or concerns you may have. 

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

…until next week.

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