Write-Offs:

May 31, 2007 | Read Time: 1 minute

As the Internal Revenue Service cracks down on charities that it says have provided down-payment help that is of more benefit to property owners than to needy home buyers, another agency has taken steps to discourage such assistance in the future. The Department of Housing and Urban Development proposes that the federal government should no longer subsidize loans to home buyers who have accepted charitable assistance that is indirectly provided by the seller. Often, the department says, the seller simply adds the amount of donated down-payment money into a home’s selling price.
In a new report, the U.S. Department of the Treasury inspector general for tax administration says that the IRS needs to develop a plan for dealing with hospitals that don’t provide sufficient community services to justify their tax-exempt status. The tax agency is currently surveying hospitals to see how much they do to meet the requirements for tax exemption. A copy of the report (Reference No. 2007-10-061) can be downloaded at http://www.treas.gov/tigta/auditreports/2007reports/200710061fr.pdf.
The IRS has released a booklet that explains to donors how they should determine the value of property they give to charities. A copy of Publication 561(4-2007), Determining the Value of Donated Property, is online.