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501(c)3 deduction disallowed

I received a notice from the IRS disallowing a contribution made to a 501(c)3 charity connected with the sale of my home. The donation was made in 2003, but in 2006 the IRS disallowed all similar charitable contributions. The IRS is demanding payment plus penalties and interest. The amount is not trivial -- it is a couple thousand dollars. At the time of my donation, I did my due diligence, checked out the charity and made sure it was legitimate. What are my options here? If the charity is not legitimate, I want my donation refunded. I can understand if the IRS decides a particular contribution is no longer valid, but since they allowed it at the time, If the charity was legitimate at the time of my donation, then shouldn't the IRS allow it for that particular year. I am not sure how to respond to the IRS on this -- the charity in question has not responded to my emails, and they have removed all the tax deduction claims from their website. So I am understandably feeling victimized here. What are my options here? If I end up having to pay this hefty fine, then I have been scammed by both the IRS and the charity, and I would never be willing to trust a charity again. If the IRS grants a charity 501(c)3 status but can take that back at any time and turn donors into victims, then that will eventually have an effect on American's willingness to donate.

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Reply to
Berkeley1
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What does that mean? If all the connection means is that you raised a lot of cash by selling your home and donated cash to the charity, it's irrelevant where the cash came from. Or was there some sort of complex transaction involving the sale and the charity?

That sounds like it wasn't a simple cash donation.

But was the form of the donation legitimate? Exactly what transpired?

Again, that looks like there was a tax-shelter-scam being run.

Did the IRS tell you that the form of donation you were making was allowed? Seth

Reply to
Seth Breidbart

The IRS is pretty flexible in abating or removing penalties and (sometimes) interest. You should submit an abatement request. Your tax advisor can help you with this. Kreig Mitchell

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Reply to
Kreig Mitchell

Was this the scheme wherein the seller increased the price of the home, contributed the excess to a 'charity,' and the charity then 'helped' a needy buyer by giving them money to buy a home, which coincidentally belonged to the seller? As described here:

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? If it were me, I'd pay the tax and talk to an attorney.

Phoebe :)

Reply to
Phoebe Roberts, EA

I forget the name of that "charity", but the whole thing was a scam, designed to disguise closing costs as charitable contributions. the IRS has cracked down on it. something like... promise... for America? can't remember the name of it. What is the "charity" name? ChEAr$, Harlan Lunsford, EA n LA

Reply to
Harlan Lunsford

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