The TIGTA report—Many Taxpayers Are Still Not Complying with Noncash Charitable Contributions Reporting Requirements (2013-40-2009) [PDF 2.4 MB]—is a follow-up to prior TIGTA audit recommendations, and presents the results of a TIGTA review of IRS actions to determine that taxpayers are complying with the reporting requirements for claiming noncash charitable contributions.
Based on a sample of 2010 tax returns claiming more than $5,000 in noncash charitable contributions, TIGTA found that the majority of the returns did not comply with the reporting requirements.
Taxpayers who donate motor vehicles generally are required to attach Form 1098-C,
Contributions of Motor Vehicles, Boats, and Airplanes, to their tax returns. By matching Forms 1098-C filed by donors with those filed by charities, TIGTA found numerous instances in which no Form 1098-C was filed by the charity. In addition, TIGTA found numerous instances in which taxpayers claimed deductions for contributed motor vehicles in excess of the amount allowed.
The TIGTA report recommends that the IRS expand its procedures:
- To identify returns claiming noncash contributions that do not have Form 8283 or a qualified appraisal attached when required
- To develop processes for systematically verifying the accuracy of noncash charitable contributions
In addition, TIGTA recommended that the IRS revise Form 8283 and the related instructions, and develop procedures to match Forms 1098-C submitted by taxpayers to those filed by charities.
IRS agreement with certain recommendations
As explained in the TIGTA report, the IRS agreed to expand its processes to identify returns claiming noncash charitable contributions that do not have Form 8283 or a qualified appraisal attached when required.
The IRS also agreed to modify Form 8283 to capture the information necessary to identify taxpayers who contribute motor vehicles—which will enable the IRS to match Forms 1098-C.
The IRS did not agree to develop procedures to match Forms 1098-C filed by taxpayers with those filed by charities.
For more information, contact:
Rick Speizman, National Partner-In-Charge, KPMG’s Exempt Organizations Tax Practice (ExoTax)
+1 (202) 533-3084