Wednesday, January 23, 2013
A report from the Treasury Inspector General for Tax Administration (TIGTA) revealed that the IRS has not a good job making sure that taxpayers are complying with the reporting requirements for non-cash charitable contributions. According to Accounting Today, "[a]n estimated 273,000 taxpayers claimed approximately $3.8 billion in potentially erroneous noncash charitable contributions in tax year 2010, which resulted in an estimated $1.1 billion reduction in tax." While taxpayers can deduct noncash charitable contributions, if the taxpayer incorrectly reports the assets they could be receiving tax refunds that they are not entitled to take.The IRS has accepted several recommendations from the TIGTA, which include clarifying reporting requirements and expanding the procedure that the IRS uses to examine tax returns that claim noncash contributions.
See Michael Cohn, Taxpayers Reported Billions in Potentially Erroneous Noncash Charitable Contributions, Accounting Today, Jan. 15, 2013.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.