Avoiding Malpractice Traps in Noncash Charitable Contributions

Practical Tax Lawyer, Vol. 14, No. 2, Winter 2000

8 Pages Posted: 1 May 2008  

Francine J. Lipman

University of Nevada, Las Vegas - William S. Boyd School of Law

James E. Williamson

San Diego State University - College of Business Administration

Abstract

Substance usually rules over form, but form is a very necessary and critical component of any tax practice. This maxim is especially true when taxpayers claim tax deductions for the FMV of their noncash charitable contributions. As the recent Tax Court decision in Hewitt v. Commissioner, 109 T.C. 258 (1997), and that decision's subsequent affirmation, 166 F.3d 332, 98-2 U.S.T.C. (CCH) P50,880 (4th Cir. 1998), demonstrate, taxpayers must follow very detailed and technical rules to substantiate deductions for charitable contributions of property. The Internal Revenue Service and the courts have confirmed that unless taxpayers (and their tax attorneys) follow the letter of the law, their noncash charitable contribution deductions may be limited to the taxpayers' cost basis in the property. Tax attorneys should use this clearly stated position to support and not undermine their clients' noncash charitable deductions.

Keywords: donations, tax policy, charitable contributions, itemized deductions, substantiation rules

JEL Classification: D64, K34, H24, H20, H21, H31, J18

Suggested Citation

Lipman, Francine J. and Williamson, James E., Avoiding Malpractice Traps in Noncash Charitable Contributions. Practical Tax Lawyer, Vol. 14, No. 2, Winter 2000. Available at SSRN: https://ssrn.com/abstract=1127503

Francine J. Lipman (Contact Author)

University of Nevada, Las Vegas - William S. Boyd School of Law ( email )

4505 South Maryland Parkway
Box 451003
Las Vegas, NV 89154
United States

James E. Williamson

San Diego State University - College of Business Administration ( email )

School of Accountancy
San Diego, CA 92182-8230
United States
619-594-6021 (Phone)

HOME PAGE: http://www.sdsu.edu

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