Americans who donated to charities last year anticipating a
tax write-off need to check those charities for legitimacy before filing.
Thousands of taxpayers are claiming a charitable donation to the Hurricane
Sandy victims and learning that the charities did not have approval from the
IRS to be a 501(c)(3) charitable organization. Unfortunately, if the charity
doesn’t have the approval then you can’t deduct donations made to these
organizations. The IRS can disallow the deduction and charge penalties and
interest on the taxes due if you claim such a deduction.
Recently, allegations have been made in a civil suit that
was filed against the Hurricane Sandy Relief Foundation. The complaint filed in
the case by the New Jersey Division of Consumer Affairs alleges the charity
took in donations claiming they would be tax deductible when in fact the
charity did not have its 501(c)(3) status.
when you give directly to a person or family, you CANNOT claim a tax deduction
for that donation. This is why you are directed to give to a specific
(hopefully, an IRS-qualified) charity, which will then route the funds to the
Some “charities” are sadly just scams while others simply never
receive the proper approval from the IRS to become a 501(c)(3) charitable
organization. It is advised by Liberty Tax to check with the IRS to see if an organization
you made donations to is eligible to receive tax-deductible contributions.
Simply visit the IRS
website and search the charity’s name. It’s also advised to do this before
you claim the deduction.
all the negative light, try not to forget that we give to help those who are
less fortunate and who desperately need their fellow Americans. A tax break (or
not) shouldn’t alter that unselfish act.