The Devil is in the Details

July 5, 2012 Posted by The Law Firm for Non-Profits, P.C. in Charitable Deductions, Donations, IRS, News, Taxes

How carefully do you follow IRS rules when making a charitable donation?

We’ve posted before about the importance of charities providing adequate acknowledgments to donors, but the duty isn’t just one-sided. If you are making a charitable donation, it is just as important for you to follow the rules.

Wondering how bad it could be if you don’t? The U.S. Tax Court recently denied an $18.5 million charitable deduction on a real estate contribution all because the taxpayer failed to include a required qualified appraisal for the property. To add insult to injury, the taxpayer was a certified real-estate appraiser, who in fact did appraise the property, but because the IRS deemed there was a clear conflict of interest, the appraisal wasn’t qualified.

Even the court felt bad, concluding that the court recognized “that this result is harsh.”

Remember, paperwork for donations is not solely the responsibility of the charity. It is just as important for donors, especially those making large donations, to consult with professionals with tax-exempt experience before making a donation.

Don’t let a failure to follow directions ruin your goodwill.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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