ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – STAY AWAY FROM THESE CHARITIES AND YOU MAY AVOID AN IRS AUDIT
By Robert S. Schriebman
Periodically, the IRS issues a bulletin to the public concerning charities that are no longer recognized as valid for tax deduction purposes. These charities either failed to timely file information returns or otherwise conducted themselves in a manner that caused the IRS to revoke their tax-exempt status under IRC §§ 501(c) and 170. On December 20, 2021, the IRS issued Announcement 2021-17 listing a number of disqualified charities. The disqualification was effective as of December 18, 2021. This means that any donation made prior to December 18th would be allowed, but any contribution thereafter would not be recognized. Here is a list of a few of the disqualified charities:
- A Greener Globe
- American Medical Missionary Care Inc.
- Father’s Rights Organization
- Kingdom Victories Outreach Ministries
- Nia Comprehensive Center for Developmental Disabilities Inc.
- Sigma Theta Tau International Inc.
- Support Our Veterans Inc.
- The Atlantis Educational Foundation
- Uplift Individuals in Christ
- Washington County Hospital Inc.
- You Are Loved LLC
- A Positive Progress Service Inc.
- Light of the World, Inc.
- New World Sanctuary Foundation
- Strength for the Journey Inc.
Pursuant to IRC § 7428, a disqualified charity has a right to file suit against the government to challenge a disqualification. The charity is still considered legal until a judge upholds the IRS’ revocation of its exempt status. If a lawsuit is filed and is pending, the law allows a maximum allowable donation of only $1,000 to the charity challenging its disqualification. The $1,000 deduction is allowed regardless of whether the donor is single or married.
In reality it is very difficult or near impossible for the IRS to comb through millions of filed returns to pick out those charities no longer recognized. The disallowance usually comes as part and parcel of a tax audit. Before making a charitable contribution, check the IRS website to determine if the charity is in good standing. In my practice I have a motto about the probability of the IRS auditing you if and when you make questionable charitable contributions. My motto is as follows, “If the IRS catches your error, the odds of being audited jumps to 100%!”
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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