About 60 percent of taxpayers who claim large-dollar non-cash charitable contributions on their returns may not be complying with federal reporting requirements, the Treasury Inspector General for Tax Administration has said.
It said the IRS is not ensuring that taxpayers are complying with reporting requirements for claiming non-cash charitable contributions and that about 273,000 taxpayers claimed about $3.8 billion in potentially erroneous non-cash charitable contributions in the 2010 tax year, which resulted in an estimated $1.1 billion reduction in tax.
Taxpayers who donate motor vehicles must attach a Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, to their tax returns, but the agency is not effectively identifying taxpayers who are not complying with those reporting requirements, according to the IG.
