Treating deductions for post-attack charities - Taxation - American Bar Association - Brief Article

Americans are responding to the terrorism attacks in New York and Washington with an enormous outpouring of charitable giving. A large number of new charitable organizations have been formed to address the needs of the victims and their families.

The American Bar Association (ABA) Section of Taxation wants to make sure that the last thing those making charitable donations have to worry about is where their money is going and to help the donors obtain all of the tax benefits to which they are legally entitled. "Tragedy has brought out the best in most Americans, but it's also brought out the worst in a few," indicates Tax Section Chair Richard M. Lipton. "Unfortunately, Americans need to be on the lookout for sham charities trying to take advantage of their generosity."

To assist consumers in making donations, the Tax Section has launched an educational campaign on its website to help donors identify legitimate charities and get the proper tax benefits for their gifts. Visitors to www.abanet.org/tax will find a checklist of things to consider before making a contribution and, later, claiming a deduction, as well as useful links and information on many of the complex tax questions that have surfaced due to the attacks.

"Contributors have a right to know where their money is going, how much of it will benefit those who really need it, and whether an organization is tax-exempt," Lipton emphasizes. "And while most people aren't motivated by tax deductions alone, they should be thinking about the records they need to keep and questions they need to answer to make sure they get the full tax benefit from their generosity."

In addition to the educational campaign, the ABA is mobilizing a special task force to explore the implications of the terrorist attacks for taxpayers and tax policy, as well as to examine ways the section might help in the recovery effort. Chaired by Michael Hirschfeld of New York, it will offer assistance to Congress, the IRS, the Treasury Department, state and local tax authorities, and other interested groups in establishing tax procedures that can offer aid to families who have lost loved ones, businesses trying to regroup and rebuild, and those who simply want to help. The section also intends to aid in the dissemination of information crucial to people who need to know how to take advantage of the aid that the tax law can give.

"The tax law has long had an important secondary role in this country of aiding people in diverse ways," Hirschfeld points out. "Whether by allowing charitable contribution deductions or aiding in the building of low-income housing, tax law can offer a helpful arm in trying to rebuild the lives of Americans affected by this tragedy."

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