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Charitable donations can cost taxpayers dearly if they don’t get the right documentation accompanying their donations, according to news reports.
Martha Albrechtfor example, had to return all of the $463,676 she claimed in deductions after donating approximately 120 items from her and her late husband’s collection of Native American jewelry and artifacts to the Wheelwright Museum of American Indians in Santa Fe, New Mexico, writes the Wall Street Journal.
While her tax return included a five-page gift deed detailing the donation, Albrecht did not include a “contemporary written acknowledgment” – a letter from the museum stating whether or not she had received goods or services in exchange for her donation. gift, according to the publication.
The requirement has been in place since 1994, promulgated by Congress to go after padded and suspicious deductions, writes the Journal.
The museum eventually clarified that no goods or services had been exchanged for his donation, but it was too late, according to the publication.
By ordering Albrecht to return the money, United States Tax Court Judge Travis Greaves noted her good faith efforts to comply, but said she still failed to comply with the rule, the Journal writes.
Gregory McNabb of Plattner, Schneider, Schneider and JeffriesAlbrecht’s lawyer, said his client declined to comment on the decision and was considering an appeal, according to the publication.
The Journal suggests that those who give gifts carefully study Internal Revenue Service charitable donation rules and ensure they comply with all paperwork requirements.
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