- Tax Watch - http://taxes.lohudblogs.com -
Audit: Taxpayers incorrectly claimed up to $3.8 billion in non-cash contributions
Posted By Cara Matthews On January 15, 2013 @ 3:52 pm In Federal government,Fraud,Taxes | Comments Disabled
More than 273,000 taxpayers claimed roughly $3.8 billion in potentially erroneous non-cash charitable contributions in the 2010 tax year, according to a new report from the U.S. Treasury’s Inspector General for Tax Administration . The erroneous deductions resulted in an estimated tax reduction of $1.1 billion.
The IRS  code permits taxpayers to deduct non-cash charitable contributions of property, clothing, vehicles, art and other items. Roughly 21 million individuals claimed such contributions in 2011 and 20 million did so in 2012, the report said.
The audit found that the IRS does not have sufficient controls to ensure that taxpayers who are taking deductions for non-cash contributions are complying with the law. Statistical samples of taxpayers who claimed they had more than $5,000 in non-cash contributions in the 2010 tax year showed that roughly 60 percent of them did not follow the required reporting requirements. The taxpayers claimed contributions totaling about $201.6 million.
There were nearly 36,000 tax returns with motor-vehicle contribution claims totaling about $77 million for which there were no corresponding forms filed by the charities that received the donations, the audit said. There were 1,708 taxpayers who claimed fair-market values of the vehicles that exceeded sale proceeds by a total of $2.2 million.
Article printed from Tax Watch: http://taxes.lohudblogs.com
URL to article: http://taxes.lohudblogs.com/2013/01/15/report-taxpayers-incorrectly-claimed-up-to-3-8-billion-in-non-cash-contributions/
URLs in this post:
 U.S. Treasury’s Inspector General for Tax Administration: http://www.treasury.gov/tigta/
 IRS: http://taxes.lohudblogs.comwww.irs.gov
 Many Taxpayers Are Still Not Complying With Noncash Charitable Contribution Reporting Requirements: http://www.scribd.com/doc/120504252/Many-Taxpayers-Are-Still-Not-Complying-With-Noncash-Charitable-Contribution-Reporting-Requirements
Copyright © 2012 Tax Watch. All rights reserved.