IRS Audits and Investigations Targeting Fraudulent Charitable Deductions: What Taxpayers Need to Know

Audits and investigations targeting fraudulent charitable deductions can expose taxpayers to significant federal penalties. As a result, when the IRS scrutinizes their charitable deductions, taxpayers must be prepared to protect themselves by every means available. Learn more from Washington D.C. tax evasion attorney Kevin E. Thorn.

The Internal Revenue Service (IRS) has recently ramped up efforts to target taxpayers who use fraudulent charitable deductions to reduce their federal tax liability. This includes conducting both civil tax audits and criminal tax investigations. As Washington, D.C., tax evasion attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains, both types of inquiries can pose substantial risks for taxpayers unprepared to defend themselves effectively.

The IRS is Targeting All Forms of Suspected Charitable Deduction Fraud

Audits and investigations focused on taxpayers’ charitable deductions can involve a wide range of specific issues. Some examples of common allegations stemming from these audits and investigations include:

• Claiming tax deductions for payments made to non-qualifying organizations
• Claiming tax deductions for personal expenses that do not qualify as charitable contributions
• Inflating the cash value of in-kind donations to qualifying charitable organizations
• Falsely claiming tax deductions for donations that were not actually made
• Perpetrating fraudulent charitable deduction schemes that are used for unlawful tax evasion

These allegations (among others) can expose taxpayers to liability for back taxes, interest, and penalties. If the IRS alleges that a taxpayer has willfully claimed fraudulent charitable deductions, criminal charges could also be on the table. Under the criminal enforcement provisions of the Internal Revenue Code, fraudulently claiming charitable deductions can carry six-figure fines and years in federal prison.

Responding to an IRS Audit or Investigation Focused on a Taxpayer’s Charitable Deductions

Responding to an IRS audit or investigation focused on a taxpayer’s charitable deductions requires an informed, strategic, and proactive approach. Taxpayers must work quickly to assess their liability exposure and determine what documentation they can use to substantiate the charitable deductions claimed on their returns. If taxpayers cannot substantiate the charitable deductions claimed on their returns, they may need to focus their efforts on settling with the IRS.

How Thorn Law Group Can Help

We have extensive experience representing U.S. taxpayers in IRS matters involving charitable deductions. If the IRS is questioning your charitable deductions, we can assess your risk and help you make informed, strategic decisions about how best to proceed. We can also work proactively with the IRS on your behalf; and, if you need to challenge the IRS’ determination of your federal tax liability, we can pursue an appeal at the IRS Independent Office of Appeals or in the U.S. Tax Court.

Contact Washington D.C. Tax Evasion Attorney Kevin E. Thorn

To discuss your federal tax situation with Washington D.C. tax evasion attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, contact us today. Call 202-349-4033 or contact us confidentially online to schedule an appointment as soon as possible.