Monday, March 19, 2007

Treasury Treasury Administration Arm Wants More Scruntiny of Noncash Donations

The U. S. Treasury Inspector General (IG) for Tax Administration (TIGTA) has called for better IRS review of noncash donations. The IG estimated that as much as $1.8 billion in unsubstantiated deductions may have been claimed during an eight-month period in 2006. Form 8283, desinged by filed by taxpayers with at least $500 in noncash deductions, is an important concern, the IG calls for both a flagging of tax returns with over $500 noncash where no 8283 is filed and the IG also wants the IRS to notify taxpayers if their returns do not include the 8283.

My guess in most cases is failure to follow IRS procedures rather than overreporting deductions. Nevertheless, given Congressional pressure to reduce the tax gap, I foresee some IRS activity to get better information reporting from taxpayers on noncash contributions.


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