The Treasury Inspector General for TaxAdministration found that taxpayers who claimed unsubstantiated motor vehicledonations may have sidestepped paying million in taxes in 2007.

TIGTA said that an estimated 92,037 taxpayers claimedunsubstantiated motor vehicle donations totaling $204 million in 2007. Anestimated 63,972 of those taxpayers may have avoided paying nearly $17 millionin taxes for 2007.

TIGTA also found that charities did not properly reportcontributions of automobiles, boats and airplanes. Furthermore, the IRS did notmatch information filed by charities regarding motor vehicle contributions withinformation on taxpayer forms.

In response to concerns regarding the legitimacy of thevaluation of donations of motor vehicles, Congress included a provision in theAmerican Jobs Creation Act of 2004 that added reporting requirements forindividuals seeking a deduction for their donation.

TIGTA recommended that the IRS ensure that returnswithout substantiation for charitable contributions of motor vehicles areprocessed using math error authority (thereby allowing the IRS to assessadditional taxes), and match the information reported by charities on Forms1098-C, Contributions of Motor Vehicles, Boats and Airplanes, with theinformation reported on taxpayers' returns. TIGTA also recommended that the IRScontinue to educate charities on the need to file a Form 1098-C for eachdonated motor vehicle with a value in excess of $500.

 

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