A new inspector general report finds an estimated 273,000 taxpayers claimed approximately $3.8 billion in potentially erroneous noncash charitable contributions in Tax Year 2010, resulting in an estimated $1.1 billion reduction in tax. Sen. Chuck Grassley of Iowa authored measures for greater accountability from taxpayers for noncash charitable contributions as Finance Committee chairman in 2004 in response to inflated deductions for donations of vehicles and other property. Grassley's reforms were enacted as part of the American Jobs Creation Act of 2004. Grassley made the following comment on today's report.
"Instead of rushing to raise taxes, the Administration should do more to collect the taxes already owed. The President has insisted on raising taxes on upper-income taxpayers, yet the report shows the Administration is giving a free pass to those claiming high-value deductions for donations of vehicles, art, or securities. Taxpayers are required to give the IRS basic information to justify tax deductions for noncash charitable contributions. When that information is lacking, it's the IRS' job to get the information or deny the deduction. Poor work from the IRS deprives the U.S. Treasury of taxes that are due. That's unfair to taxpayers who don't take undeserved or badly documented deductions. The Administration needs to fix this problem before demanding new revenue."