DAILY HEADLINE NEWS FEED | ARCHIVES OF PAST MONTHS

The House and the IRS have both taken action Toward Victim Relief

The IRS has announced it will provide tax relief for taxpayers affected by the September 11, 2001 terrorist attack. These include extending deadlines for the filing of returns and other required documents, extending deadlines for tax payments, and postponing the performance of certain tax-related acts.

In the wake of the terrorist attacks on the United States on September 11th, the House passed H.R. 2884 - The Victims of Terrorism Relief Act of 2001. The bill would provide estate and income tax relief to those who perished in the attacks, and income tax relief to family members receiving benefit payments. The Senate is expected to take the measure up on September 20th.

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Senator McConnell offered War Bonds amendment

When the Senate considered the annual funding bill for the Treasury Department, Senator McConnell introduced an amendment that would authorize the Treasury Department to issue war bonds to fund the fight against terrorism. The amendment was included in the bill passed by the Senate and now goes to a joint Congressional Committee to resolve differences with the version passed by the House.

This amendment provides authorization power but does not mandate the issuance of war bonds. The legislative language states, they shall be "in such form and denominations, and shall be subject to such terms and conditions of issue, conversion, redemption, maturation, payment, and rate of interest as the Secretary may prescribe."

The administration has not yet indicated whether it wants to utilize war bonds. A final vote on the spending authorization bill would be expected some time in the October/November time frame.

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Scams Involving September 11th Victim Support

Some unscrupulous individuals and organizations are attempting to profit from our collective grief and generosity. Within hours after the attacks, questionable charitable solicitations began to appear on the Internet, charity watchdogs say. "Spam" e-mail and postings on Internet community forums solicited money for victims' families. One such message claimed to benefit the American Red Cross, but the link led to a Web site unconnected with that organization, according to the SpamCon Foundation, a nonprofit group that fights unsolicited e-mails. The American Red Cross has warned that several unauthorized Internet sites are using its name and symbol to raise money. Unscrupulous and questionable charities tend to emerge whenever a crisis occurs. But this time, givers may be particularly vulnerable, says Bennett Weiner, chief operating officer for the Better Business Bureau's Wise Giving Alliance. "Many of these problems have happened in the past, but I think the attention to charitable need is magnified because of the intensity" of the disaster, he says.

Fortunately, there are hundreds of legitimate organizations raising money for everything from victims' families to abandoned pets. How to ensure that your money goes to a worthy cause:

• Give to charities with an established track record and a history of sound fiscal management. Charities that receive high marks from the American Institute of Philanthropy, a watchdog group, include the Red Cross, Americares, CARE, Catholic Relief Services and the Salvation Army.
• Ignore e-mail solicitations for donations. Legitimate charities generally avoid using spam to raise money.
• Never make an on-the-spot decision to give to charity. If you receive a phone call, or someone comes to your door soliciting money, ask for information about the charity. Conduct your own research before you give.
• Don't give out personal financial data over the phone to someone claiming to represent a charity. The caller may be a con artist seeking to steal your credit card number or other financial information.
• Don't give cash. When you make a cash donation, "you expose yourself to pilferage, loss and theft," Weiner says. Write a check to the charitable organization, not the individual who is soliciting money. The check also will provide a record if you want to deduct the contribution on your tax returns.
• Be wary of telemarketers soliciting money for families of police or firefighters. This was a problem even before the Sept. 11 attacks.

From USA TODAY article by Sandra Block

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Make Sure You Document Your Deductions

A panel for the Sixth District Court of Appeals has reviewed the decision of the United States Tax Court in Jennings v. Commissioner, and determined that oral argument is not needed in its ruling to uphold the lower court's decision. In the original case, Jennings failed to properly document his cash charitable contributions. The deductions were denied and negligence penalties assessed.

In support of this argument, Jennings submitted a register from a savings account which he alleged he had established in 1995 for the purpose of making charitable contributions. For the years 1995 and 1996 the register showed numerous withdrawals for apparently non- charitable purposes, and only two or three withdrawals where the notations indicated an intent to make a donation to a charitable organization. The register did not support the claimed purpose for the savings account, there were no regular indications of charitable donations, and the amounts did not correspond with the deductions Jennings claimed on his returns. Jennings also introduced articles which he had written for an allegedly nonprofit publication which he claimed could be treated as charitable contributions. However, he submitted no evidence of the value of such articles. Therefore, the Tax Court's finding that Jennings was not entitled to the deductions for cash charitable contributions was not clearly erroneous.

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The preceding is meant as general information and does not represent legal or tax advice. Individual circumstances vary - please consult your legal and tax advisors about your specific situation.
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