In our last blog post we talked about the tax benefits of maximizing your charitable giving before the end of the year. However, if you plan on donating cash, non-cash assets, or property, such as cars or real estate, you’ll want to make sure it’s going to a reputable organization.
According to a recent press release, the IRS is advising taxpayers to be on the lookout for scam artists who set up fake charities and non-profit organizations to take advantage of peoples’ generosity. Although most people are aware that sham organizations are often set up after natural disasters, such as wildfires, hurricanes, and tornadoes, others are set up during the holiday season.
“Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return by reducing the amount of their taxable income, “the IRS states. “But taxpayers should remember that to receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, use the IRS Tax Exempt Organization Search tool.”
Other tips to remember include the following:
- Scam charitable donation ploys are often initiated by phone. If Jane Smith from XYZ Charity calls your home or your cell phone, out of the blue, you’ll want to be wary. If they’re pressuring you to give immediately, no questions asked, consider this to be a big red flag.
- If you are thinking about giving, ask for the organization’s exact name, their mailing address, and their website. If everything checks out while you’re on the phone, you should still be skeptical. There have been times where dishonest actors have claimed to be from a reputable organization when they’re not. Other telemarketers have used fake charity names that are similar well-known organizations (i.e., saying they’re calling from the ASBCA, instead of the ASPCA). This is a strategy that’s used to confuse people.
- Lastly, if a telemarketer is asking you to make a donation via WesternUnion or pre-paid gift cards, this is another red flag. The safest way to make a donation is via credit card or check.
For more information on how to maximize your charitable giving in advance of tax season, we can help. Call the office of Hughes, Snell & Co., PA today to schedule a time to speak with an expert. All calls are handled confidentially and consultations are always free.
