Tax court: Donations

[ILLMAS]

Maybe this has been posted here before, but worth taking another ok.

http://www.google.com/url?q=http://www.jdsupra.com/legalnews/tax-court-no-mercy-for-donors-with-inad-35146/&sa=U&ei=n8voUMDZMeSE2gXu-IHADQ&ved=0CBoQFjAC&usg=AFQjCNEmuGhUP8uRyAiVeeJJ88wV2LL0Dg

[jainen]

>>Durdens had "failed strictly or substantially to comply with the clear substantiation requirements<<

I agree with the court. This isn't rocket science--the substantiation requirements are indeed clear, and not very difficult. And--having the receipt before filing is one of the eligibility factors, so the tax preparer may be at risk for a malpractice claim.

[JohnH]

I think it's one of the stupidest requirements IRS has. It elevates form over substance to the level of absurdity. But it does illustrate the definition of a bureaucrat as someone who takes great pleasure in telling you a perfectly logical course of action can't be done because it's "against the rules."

I do agree that it raises the risks to the preparer.

[jainen]

>>a perfectly logical course of action can't be done<<

That logical course of action being, "anything goes"? I can claim whatever donations I want, without documenting them unless I happened to get audited? Or is it the charities who depend so much on tax-deductible donations, but shouldn't be bothered to even acknowledge the terms? If we do get audited, we can make up whatever we need then?

Section 170(F) is not just some bureaucratic policy, unless you think George Bush was just a bureaucrat. Congress passed the substantiation rules because the private market--our financial services industry--failed to control its own abuses. The worst was cars--IRS apparently found a lot of overvaluation and special arrangements. Maybe a few preparers spoiled it for all, but in any case you now need a 1098-C. And you can be sure there's more to come. Last year California tried to demand parcel numbers to deduct property tax.