Question

michael and jan filed their 2018 tax returns (married filing jointly). In total, they made $25,000 in cash contributions to a qualified charitable organization in 2018, but did not receive a receipt for that organization and did not keep any records of those contributions themselves. In 2019, they were notified by the IRS that their 2018 return was selected for examination and audit. Based on these facts and the requirements of charitable deductions, will the IRS allow this deduction? Why or why not?

Answer 1

An IRS audit usually will ask for additional documentation to substantiate the items and deduction reported on the tax return. The IRS in this case may send a letter asking for the proof of the charitable donation. Typically submitting a The couple here do not have any records and did not receive the receipt as well. A charitable donation upto of $250 can be claimed without receipt and here the limit has been exceeded. Hence, IRS may not sustain the deduction without proof and additional tax will have to be paid for the deduction taken.