Your organization might not be undertaking donors any favors by letting them overvalue their deductions. As an example, overzealous donors who deduct as well substantially face a penalty of 20 percent of your taxes they need to have paid. This hefty penalty applies in the event the worth of your house that the donor claims on the return is 200 percent or additional of your appropriate quantity, and they underpaid their tax by additional than $5,000 mainly because of that overstatement. Are your donors as well wealthy to be concerned about a paltry 20-percent penalty? Have them attempt the IRS’s 40-percent penalty on for size.
This penalty applies exactly where the worth of your claimed deduction is additional than 400 percent of your appropriate quantity, plus the donor underpaid his or her tax by additional than $5,000 mainly because
of your overstatement.
