Three of our favorite tax tips for March:
  • For yet another reminder about the importance of obtaining a qualified appraisal for transactions in order to secure a charitable deduction, as well as evidence that the IRS will continue its scrutiny of conservation easements, see the opinion in Sells v. Commissioner of Internal Revenue, a Tax Court decision issued earlier this year. (Bonus: On the positive side for the taxpayer, this ruling is an illustration of the type of case where the IRS may agree to abate penalties, even those related to the taxpayer’s misvaluation.)
  • If you’re having trouble keeping up with changes to the tax laws, you are not alone! If you are a subscriber to the Wall Street Journal, we highly recommend its recently-released tax guide. For a guide that does not require a subscription, Kiplinger offers a helpful summary of the changes effective for tax year 2020.
  • Finally, we suggest skimming the examples in Private Letter Ruling 202107012, released on February 19, 2021, as a reminder of what types of activities are deemed to go beyond the Internal Revenue Service’s definition of “charitable and educational” for qualification as an exempt organization under Internal Revenue Code Section 501(c)(3). (Hint: Holiday parties, outings to restaurants and bars, car shows, and other social gatherings can tip the scales against exemption, even if those activities are conducted in connection with fundraising and collecting in-kind donations for charitable causes.)

This news is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.