Archive for July 11th, 2017

On tonight’s episode of Family Fraud, we’ve got two cunning clans eager to prove who has the most flagrant disregard for the tax law! Let’s meet our contestants:

Say hello to the Paynes! Hailing from Florida, the Paynes thought nothing of claiming $90,000 in non-cash charitable contributions in 2011, despite sporting an adjusted gross income of $180,000! Among those contributions were nearly $40,000 in gifts of furniture, a fact made all the more remarkable by the fact that the Paynes lived in a 1,600 square foot home with a one-car garage!

Next let’s welcome the Ohdes! This West Virginia family claimed $142,000 in non-cash charitable contributions in 2011, alleging that they made over 20,000 separate gifts to one local Goodwill organization! In addition to 3,500 items of clothing, included among the donations were 36 lamps, 22 bookshelves, 20 desks, and 16 bed frames. And if you think it’s unrealistic that one family could accumulate that much junk, well, then you’ve never driven through West Virginia.

Who are we kidding, with both families equally willing to throw conventional wisdom and common sense to the wind in hopes of a big tax break, everyone’s a winner. Gary, tell them what they’ve won!

Both families will enjoy an all-expenses paid (by them) trip to Tax Court, where the IRS will teach them the finer points of the substantiation requirements for charitable contribution deductions under Section 170! And they won’t be leaving there empty handed…both the Paynes and Ohdes will exit the court with substantial underpayments, penalties and interest!

Continue reading on Forbes.com

Authored by Tony Nitti, Withum Partner and writer for Forbes.com.

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