Monday, October 19, 2009

IRS Update: Supporting Org Proposed Regs, Vehicle Donation Documentation Issues, and Form 990 Videos

Proposed Supporting Organization Regulations.  The proposed regulations interpret Congress's 2006 legislation relating to Type III supporting organizations.  The most significant aspect of these regulations is the lack of state law trust provisions that existed in the pre-2006 regulations governing such supporting organizations.  Comments and requests for a public hearing are due by December 23, 2009.

TIGTA Criticizes IRS Procedures for Vehicle Donation Documentation.  The Treasury Inspector General for Tax Administration issued a report critical of the IRS's procedures for ensuring that taxpayers who donate motor vehicles to charities meet the additional documentation requirements imposed by Congress in 2004.  While the IRS has created a special form (1098-C) that is supposed to be filed by charities for each contribution of a motor vehicle with a claimed value of more than $500, TIGTA found that there was no record of such a form being filed in a significant number of cases and that the IRS does not match information on that form (when filed) with information on the contributors's returns.  TIGTA estimated that this and other procedural failures resulted in over 90,000 taxpayers claiming (apparently unchallenged) deductions totaling $204 million without adequate documentation in 2007.  The IRS responded, however, that Form 1098-C matching would not be effective, and additional outreach efforts (also recommended by TIGTA) were not necessary.

Form 990 Video Series.  As part of its ongoing efforts to provide additional guidance on how to complete the newly expanded Form 990, the IRS has developed a video series covering key aspects of the new form.  The videos use a hypothetical organization as a case study to illustrate how to complete the form.


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