Page 1 of 3 1 2 3 LastLast
Results 1 to 10 of 21
  1. #1

    Default Claiming Expenses as Charitable Deductions

    My father-in-law is retired from the military and he serves in the Coast Guard Auxiliary. He has his own vessel that he uses to support NASA missions. These folks patrol the waters off Cape Canaveral to clear civilian vessels from entering the debris zone if there is a mishap during a launch. He has travel expenses, vessel maintenance, and numerous other expenses associated with this service, but it is not paid work. Members of the CG Auxiliary are volunteers. The question is just how much of his expense qualifies as a charitable deduction. His time, of course, doesn't give him anything to deduct and I know that volunteer miles on cars are deductible. But are any of his uniform expenses or expenses associated with his vessel deductible? If you write a check to the treasury that can be deducted, but what about services to the government that cause a taxpayer to incur expenses they would not otherwise incur? What should be deductible do you think?

  2. #2
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Charitable Deductions

    If the Coast Guard Auxiliary is a non profit organization registered with the IRS, they can provide him receipts for charitable donations he has tendered on behalf of the organization excluding his time. As a private individual he cannot deduct things, such as fuel, he volunteers.

  3. #3
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Charitable Deductions

    Quote Quoting Disagreeable
    View Post
    As a private individual he cannot deduct things, such as fuel, he volunteers.
    I disagree. You may deduct as part of a charitable donation certain expenses that you incur as part of your service for a qualified charitable organization while working for the charitable organization. IRS Publication 526, which covers charitable contributions, says that explicitly:

    Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be:

    • Unreimbursed
    • Directly connected with the services,
    • Expenses you had only because of the services you gave, and
    • Not personal, living, or family expenses.


    Among the examples the IRS gives in that publication are:

    Car expenses. You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance.
    If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution.
    You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate.
    You must keep reliable written records of your car expenses. For more information, see Car expenses under Records To Keep, later.

    And as for uniforms, the IRS states, again in Publication 526:

    Uniforms. You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization.

    So, if the uniform in this case is used only for the charitable activities, the cost of the uniform itself may be deductible as a charitable donation. Certainly the cost of cleaning and upkeep for the uniform that are incurred because of the charitable activity may be deducted. The cost of the boat fuel actually used during the charitable work would be deductible, though general repair, maintanance and upkeep on the boat would not be deductible. Some travel expenses you incur for travel that is entirely for the charitable activity and does not have significant

    As for travel expenses, those too may be deductible. IRS Publication 526 states:

    Travel. Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses.
    The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses.

  4. #4
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Claiming Expenses as Charitable Deductions

    Doing so in an ad hoc manner in the amounts we are talking about will trigger an audit for which OP will have no documentation. So if we want to get to the nitty gritty, you can however, expect an audit and to lose unless you have receipts from the organization. I have assisted someone through a few IRS audits.

  5. #5
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Claiming Expenses as Charitable Deductions

    Quote Quoting Disagreeable
    View Post
    Doing so in an ad hoc manner in the amounts we are talking about will trigger an audit for which OP will have no documentation. So if we want to get to the nitty gritty, you can however, expect an audit and to lose unless you have receipts from the organization. I have assisted someone through a few IRS audits.
    You don’t need documentation of those expenses from the charity. After all, these are expenses you are incurring to do work for the charity and for which the charity is not reimbursing you. If the charity reimburses you or otherwise pays you for it, you cannot deduct it. I agree that you do need documentation to support the expenses claimed, however, just as you do with any deduction you take.

  6. #6
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Claiming Expenses as Charitable Deductions

    The particular volunteer work he is doing is unique and deductions are easily open to fraud. Having documentation of the expenses certified by the organization precludes almost completely a potential IRS auditor looking at your documentation and saying denied. He could be using the trip as an excuse for a FL vacation and fishing trip. The non profit will draw the line on allocating expenses for fuel, boat use per hour and other expenses in their donation receipt.

  7. #7
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Claiming Expenses as Charitable Deductions

    Quote Quoting Disagreeable
    View Post
    The particular volunteer work he is doing is unique and deductions are easily open to fraud. Having documentation of the expenses certified by the organization precludes almost completely a potential IRS auditor looking at your documentation and saying denied. He could be using the trip as an excuse for a FL vacation and fishing trip. The non profit will draw the line on allocating expenses for fuel, boat use per hour and other expenses in their donation receipt.
    A charity is not going to provide receipts for something it neither pays for nor receives. However, if the taxpayer gets the documentation right, the deduction for these sorts of expenses can be supported in an audit even though the documentation does not come from the charity itself. The circumstances matter, of course. Let’s take the uniform expenses for example. If the uniform may only be worn for participating in the Auxiliary activities, then clearly all the costs for buying and maintaining the uniform (e.g. dry cleaning expenses, mending, etc) are for the charitable activity and deductible. All the taxpayer needs is documentation of the costs, e.g. reciepts for uniform purchases, dry cleaning receipts, etc. In a Tax Court case very similar to the situation described in the OP, the taxpayer was a volunteer for the Civil Air Patrol (CAP). He too claimed chartiable deductions for buying and maintaining his uniform for the CAP activities. He bought the uniform not from the CAP, but from the military exchange at an Air Force base. He didn’t get his uniform cleaned by the CAP. As to the deductions for buying and maintaining the uniform, the Tax Court said:

    Petitioner testified at the trial that he spent $127.22 in 1971 for military type uniforms for wear in Civil Air Patrol activities. He produced receipts to substantiate this testimony. Petitioner also testified that the regulations required that he not wear these uniforms except to Civil Air Patrol related activities. Sec. 1.170A—1(g), Income Tax, Regs., provides that the cost of a uniform without general utility which is required to be worn in donating services is deductible as a charitable contribution. The evidence is clear that the uniforms purchased by petitioner in 1971 are within the nature of the type of uniforms intended by the regulation to be deductible as out-of-pocket expense for the use of a charitable organization. We hold that the $127.22 spent by petitioner for uniforms in 1971 is deductible as a charitable contribution since it is an out-of-pocket expense incurred in performing donated services.

    For the same reason we hold the cost of the uniforms to be deductible, we hold the $96.20 cost to petitioner of cleaning the uniforms to be deductible. The evidence of the cost of cleaning the uniforms is not as clear as the evidence of the amounts expended for uniforms. However, the question is factual and we have found from the evidence that in 1971 petitioner expended $96.20 for cleaning his Civil Air Patrol uniforms. Therefore, we hold that petitioner is entitled to deduct $96.20 as a charitable contribution as the cost of maintaining uniforms worn to Civil Air Patrol activities.

    Miller v. Commissioner, 34 T.C.M. (CCH) 1207 (T.C. 1975) acq. recommended by In re: Larry Miller, 1975 WL 38143 (IRS AOD Oct. 12, 1975).


    The court didn’t insist on documentation from the CAP of those expenses. The taxpayer had receipts for the expenses and was able to tie those to his charitable activities through his testimony and other evidence. Since the uniform could only be used for CAP activities and he had documentation of the costs for the uniform (though not from the CA), the court allowed the deduction.

    I don’t believe in not taking deductions simply because the IRS might audit the taxpayer. If the taxpayer is entitled to the deduction and has the documentation to support it, he or she ought to claim the deduction to which he is entitled. Fear of an audit only benefits the government. Sure, the IRS might deny it in an audit, but the IRS agents sometimes get it wrong, as the Miller case above demonstrates.

  8. #8
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Claiming Expenses as Charitable Deductions

    We are not discussing the normally covered items. We are covering the documentation of extraordinary expenses associated with the individuals donating assets and resources that he partly owns and partly must purchase. I suggest you explain your philosophy to the person I know who currently has an IRS judgment against him for about 130k because he elects to do things in the manner you suggest.

  9. #9
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Claiming Expenses as Charitable Deductions

    I'm sorry I will have to agree with Taxing Matters on this. I do an extensive amount of volunteering and the association sends a nice legal description specifically addressing a lot of these items including the travel expenses to get to the location we are volunteering, etc....

    Trying to claim these after the fact is likely to raise eyebrows with the IRS, but if you keep contemporaneous records for things like mileage and receipts for other things where you can, this should NOT be a problem.

  10. #10
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Claiming Expenses as Charitable Deductions

    I agree with Taxing Matters and flyingron as well. Good documentation is all that is needed.

    1. Sponsored Links
       

Page 1 of 3 1 2 3 LastLast

Similar Threads

  1. Federal Taxes: Claiming Dependent Tax Deductions After Modification of Custody
    By gr8dad in forum Tax Law
    Replies: 8
    Last Post: 11-28-2014, 05:09 PM
  2. Federal Taxes: Deductions on Pre-Rental Expenses
    By Taxed in forum Tax Law
    Replies: 10
    Last Post: 04-17-2012, 08:42 PM
  3. A Charitable Time of Year
    By souperdave in forum Banter
    Replies: 3
    Last Post: 12-01-2011, 11:23 PM
  4. Replies: 5
    Last Post: 11-13-2009, 06:49 PM
  5. Making a Charitable Gift from an IRA
    By AL in forum Tax Law
    Replies: 1
    Last Post: 12-20-2005, 06:28 PM
 
 
Sponsored Links

Legal Help, Information and Resources