The IRS Closely Investigates Tax-Exempt Organizations

         Every year, the Internal Revenue Service (IRS) publishes a list of the 12 most common tax scams. It is called the “Dirty Dozen”. While these scams may peak at the beginning of the year, they can be found at any time so we must always be vigilant to avoid these situations. It seems that a few large organizations with a Tax-Exempt status may be involved in some land investments with inflated values. The details of why this scheme makes the “Dirty Dozen” list can be read here.

          In this latest example, land appraisers, tax preparers, and others may be involved in billions of dollars of inflated deductions. These land deals, called syndicated conservation easements, make it possible for more than 1 person to claim a charitable deduction of property. The legitimate reason to donate these properties is to protect them from future development. The concern from the IRS is that this provision is being abused, therefore allowing for a deduction and tax savings that greatly outweigh the actual investment.

          As the audits of these Non-Profits that are taking part in these land deals continues, remember that the IRS may be slow, but it does catch up to those who evade the law. If the results of the audits prove fraud, the results will be severe. When there is abuse of tax law, the IRS will not stand down. It’s best to not begin down this path at all.

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