Treasury Inspector General for Tax Administration
January 15, 2013
TIGTA - 2013-01
Contact: David Barnes
WASHINGTON – Approximately 60 percent of taxpayers who claim large-dollar noncash charitable contributions on their returns may not be complying with Federal reporting requirements, according to a new audit report released publicly today by the Treasury Inspector General for Tax Administration (TIGTA).
TIGTA’s report found that the Internal Revenue Service (IRS) is not ensuring that taxpayers are complying with reporting requirements for claiming noncash charitable contributions. An 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.
“Taxpayers can generally deduct noncash charitable contributions made to qualifying organizations during the tax year on their Federal tax returns,” said J. Russell George, Treasury Inspector General for Tax Administration. “However, taxpayers who do not comply with the reporting requirements for noncash contributions could be incorrectly reducing their tax liabilities and receiving tax refunds to which they are not entitled,” he added.
Taxpayers who donate motor vehicles must attach a Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, to their tax returns. However, the IRS is still not effectively identifying taxpayers who are not complying with reporting requirements for donations of motor vehicles.
TIGTA made six recommendations for improvement to the IRS. IRS management agreed with three of the six recommendations, and partially agreed with one.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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