Tax professionals warn that improper donation reporting is triggering audits and penalties for well-meaning taxpayers.
IRVINE, CA / ACCESS Newswire / August 15, 2025 / The Internal Revenue Service is intensifying its review of charitable deductions on tax returns, targeting inflated valuations, missing documentation, and donations to organizations that do not qualify for tax-exempt status. While charitable giving remains a popular tax strategy, experts say even honest mistakes can lead to costly penalties.
"Many taxpayers believe that as long as they've donated, they're in the clear - but the IRS is looking much more closely at how deductions are calculated and documented," said a spokesperson for Clear Start Tax, a nationwide tax relief and resolution firm. "We're seeing more audits where charitable deductions are flagged, even for people who thought they followed the rules."
Common pitfalls include overvaluing donated goods, failing to obtain required receipts, and claiming deductions for contributions to groups that are not officially recognized as tax-exempt. According to Clear Start Tax, these errors often occur when taxpayers rely on rough estimates or forget to verify an organization's IRS status before donating.
"The IRS expects precise records," the spokesperson explained. "If you donate clothing or household items, you need a detailed list and fair market value. If you give cash or make an online donation, you need a receipt from the charity. Without this, the deduction could be denied, and penalties may apply."
By answering a few simple questions, taxpayers can find out if they're eligible for the IRS Fresh Start Program and take the first step toward resolving their tax debt.
Clear Start Tax offers the following tips for safe charitable giving:
Verify eligibility: Confirm the organization's tax-exempt status using the IRS Tax Exempt Organization Search tool.
Document everything: Keep receipts, acknowledgment letters, and itemized lists of non-cash donations.
Be realistic about value: Use thrift store prices or IRS-approved valuation guides for goods, not original purchase prices.
Track contributions year-round: Don't wait until tax season to organize donation records.
"Giving is a great way to support causes you care about and reduce your tax bill," the spokesperson said. "But if you don't follow IRS guidelines to the letter, that good deed can end up costing you more than you saved."
About Clear Start Tax
Clear Start Tax is a national tax resolution and relief firm that helps individuals and businesses address IRS and state tax challenges. With a team of experienced professionals, the company specializes in resolving back taxes, negotiating settlements, and ensuring compliance with tax laws.
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Contact Information
Clear Start Tax
Corporate Communications Department
tech@clearstarttax.com
(949) 800-4011
SOURCE: Clear Start Tax
View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/business-and-professional-services/irs-cracks-down-on-inaccurate-charitable-deductions-clear-start-1060147
