ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – MIDDLE EAST CRISIS – BE AWARE OF PHONY CHARITIES
By Robert S. Schriebman
With the tragic crisis in the Middle East many well-meaning people want to help. Generosity and good intentions are all very well and good. Having said this, this crisis also breeds evil people who create phony charities designed to steal both your hard-earned money and your identity. A phony charity means that your money will not be going for noble purposes. And the donation cannot be deducted on your IRS or FTB tax returns! You must be aware of charities you have never heard of. Check out the charity first and confirm it is authentic.
You should consider checking the IRS’ Tax-Exempt Organization Search (TEOS) tool on IRS.gov to help find and verify qualified legitimate charities.
The use of the IRS search tool (TEOS) can accomplish the following:
- Verify the legitimacy of a charity.
- Check its eligibility to receive tax-deductible charitable contributions.
- Search for information about an organization’s tax-exempt status and filings.
Criminals set up fake charities that take advantage of your generosity especially in these dark days in the middle east. Typically, they ask you for money and personal information which can be used to perpetrate identity theft. They use emails, fake websites, and alter or “spoof” their caller ID to make it look like the real thing. Their most common targets are seniors and groups with limited English skills.
The IRS offers the following tips on how to protect yourself from scammers.
If you haven’t heard of the charity before, the chances are it is a scam. These scammers are smart and often create a phony charity whose name is similar to an existing legitimate charity. Be smart. Use the IRS source to verify the charity. Also, some legitimate charities have been suspended by the IRS for one reason or another. Don’t give to a suspended charity.
Don’t give in to pressure.
A true charity is happy to get your donation at any time. Don’t let a fast-talking scammer separate you from your money.
Don’t give more information than needed.
Giving money is one thing, giving personal information is quite another. If the charity starts asking you for personal information cut them off. Giving more than your name and address should be a “red flag” that you are being scammed.
Be wary about how a donation is requested.
Never work with charities that ask for donations by giving numbers from a gift card or by wiring money. That is a sure sign of a scam. Pay by credit card or check only, but first verify if the charity is real.
Claiming a Deduction
Tax laws relating to the nature and extent of charitable gifts are very complicated. Keep it simple. Giving money can clearly be deductible. If you give goods such as personal property, you are limited by the fair market value and other complex rules. Your best to contact a knowledgeable tax professional whenever you give a donation other than money.
You want to do the right and generous thing. Go with your gut. If you have any doubts about the charity don’t give. Check with the IRS first.
For more information see IRS Publication IR-2023-196.
Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD, and he is not employed by the EDD or any other agency of the State of California.
Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
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