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April 15, 2009

Abuse of Charitable Deduction Listed in IRS's "Dirty Dozen" Schemes

The Internal Revenue Service’s annual list of the “dirty dozen” tax schemes that Americans must avoid includes the abuse of the charitable-tax deduction and of charities themselves.

The IRS said it “continues to investigate various schemes involving the donation of noncash assets, including easements on property, closely held corporate stock, and real property.”

Often, the tax agency said, “the donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the item back at a later date at a price the donor sets.”

The IRS said it continues to see the misuse of tax-exempt organizations. “Abuse includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or income from donated property,” the IRS said.

— Grant Williams

Wednesday April 15, 2009 | Permalink

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