- The Washington Times - Thursday, March 28, 2002

ASSOCIATED PRESS

Tax season is getting easier for people and charities involved in the outpouring of generosity that followed the September 11 attacks.

The Internal Revenue Service is requiring less documentation for donations made last fall, making it simpler for taxpayers to take deductions, and easing the burden of paperwork for nonprofit organizations.

More than $2 billion has been contributed specifically in response to the attacks on New York and Washington, according to the Chronicle of Philanthropy. Much was donated to established groups such as the American Red Cross, but the IRS also lists 262 tax-exempt organizations that were created in the weeks after the attacks.

These less-experienced groups, tax experts say, could be having trouble getting out the paperwork a taxpayer needs to justify claiming a charitable deduction.

"More established charities are more accustomed to sending out letters automatically," said Bob D. Scharin, editor of Warren, Gorham & Lamont's Practical Tax Strategies.

Current law requires taxpayers making contributions of $250 or more to have "contemporaneous" written documentation from a charity if their tax return is challenged. A canceled check by itself isn't good enough, because cheaters could pad the amount with money used for some non-charitable purpose.

For contributions made after September 11 and before the end of 2001, the rules have been relaxed for deductions that could be claimed on tax returns due April 15 in most of the country.

The IRS says taxpayers who made such donations will have until Oct. 15 to either obtain the normal written acknowledgment or show a good-faith effort to get one. Such an effort could include a letter or an e-mail sent to the charity.

Other rules remain the same. For instance, a qualified appraisal is required for any non-cash contribution over $5,000, or over $10,000 for securities that are not traded publicly.

Taxpayers who traveled to New York or Washington to help a church or charitable group with recovery efforts could also qualify for deductions. Reasonable out-of-pocket food, lodging and travel expenses including 14 cents per mile for people who drove can be deducted, but not if the taxpayer was already reimbursed.

"It would be helpful to get a letter saying that you were not reimbursed," Mr. Scharin said.

RIA, a New York publisher for tax professionals, has these other tips:

•There is no deduction for the value of services rendered to a charitable cause. For example, a lawyer who provided free legal work for a charity can't deduct those as normal billable hours.

•First-class accommodations for an out-of-town charitable trip can be deducted, but only if they are reasonable given the circumstances. Court decisions have permitted such deductions for senior charity officials because staying in luxury hotels was acceptable for a person in that position.

•Wining and dining people such as potential contributors on behalf of a charity is deductible, but not the taxpayer's own food or drink.

•An asset purchased to perform volunteer duties, such as a car, cannot be deducted as long as the taxpayer retains ownership. But it is deductible if the taxpayer either donates the purchase price or the asset itself to the charity.


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