The IRS is Watching Your Charity Deductions


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The IRS has yet another red flag – charity deductions. In a recent case, a couple had tithed payments to their church. They had cancelled checks. They had a letter from the church affirming the deduction.

But, the IRS denied their charitable deduction. They couldn’t believe it and so they appealed it. Denied. They took it to Tax Court. And they lost.

The IRS (and the Tax Court) had two problems with the charity deduction. First, the donation was made in 2006 but the letter from the church was dated in 2008. They court felt that the letter wasn’t timely and so didn’t qualify. The other problem was that there must be a statement that donor did not receive any goods or services, or if he did, what the value was. The letter from the church didn’t have any such statement. So, the IRS and the Tax Court said there was no deduction.

The IRS is getting tough and it seems that they are looking for every problem they can. It’s never been more important to make sure your records are in great order and your tax return has every i dotted and t crossed.



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