Scam-10: Improper charitable deductions

The use of tax-exempt organizations to improperly shield income or assets from taxation remains on the latest tax scam list. In these schemes, a taxpayer moves assets or income to a tax-exempt supporting organization or a donor-advised fund, but maintains control over the assets or income. The filer then claims a tax deduction for the gift without actually providing a benefit to the charity. The IRS says it also is still seeing overvaluation of donated property, a situation addressed in a new 2006 tax law, and it is seeing private tuition payments being disguised as charitable contributions to religious organizations.

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