Charity Contribution Tax Deductions for Individuals Research Paper

Charity Contribution Tax Deductions for Individuals - Research Paper Example IRS, organizations that legally qualify to receive charitable contributions that tax system would allow as deductions includes registered churches and government organizations. However, the IRS accepts application for organizations who would wish to qualify as charitable after they apply and legally get an approval letter. Otherwise, the IRS would reject deductions for any charitable contributions submitted to the aforementioned organizations. It is imperative to understand that IRS would only accept charitable contributions that taxpayers have submitted to qualified organizations. Therefore, IRS would not deduct charitable contributions made to political organizations, political candidates, and individuals. Apparently, taxpayers who donate property instead of cash to legally qualified organizations have the right to claim tax deductions on their taxable income based on fair market value. Fair market value relates to the inherent price that a property would remain in transaction between a willing seller and buyer (Rosen 230). Normally, IRS rejects individuals deductions for charitable contributions relating to property donations mainly because the latter’ claims don not conform to the fair market value. It is important for taxpayers to determine appropriately the fair market value for property donated before claiming charitable deductions. Otherwise, IRS would reject application for deductions related to property donations in cases where taxpayers do not inclusively calculate the current fair market price of the donations. Majority of court cases involving IRS denying deduction of charitable contributions on taxpayer’s taxable income involves poor timing by the latter. According to IRS, taxpayers who wish to have their charitable contributions deducted on taxable income must submit the documentations and legal requirements detailing the contributions before close of tax year. Timing contribution before close of an individual’s tax year is imperative in