IRS Eyes Charitable Donation Abuse in New Audits, Tax Pros Say

Tax attorney Daniel Strickland was quoted in a Bloomberg Law article analyzing the IRS' renewed focus on auditing charitable donations with inflated asset values, ranging from art to medical devices. The agency's crackdown comes as it continues to grapple with syndicated conservation easement shelters, a tax avoidance strategy in which partnerships take a large charitable contribution deduction for donated land, while also managing workforce reductions and leadership turnover. According to the article, the IRS is increasingly shifting trained examiners toward other types of charitable contribution cases and prioritizing abuses involving tax-exempt organizations. Mr. Strickland is among the tax controversy practitioners who have noted the rise in new audits this year and told Bloomberg Law the agency's audit activity is centering on how assets are being valued, not only in non-cash donations but also in energy projects that qualify for investment tax credits.

"It all comes back to issues that the IRS is identifying in valuation – maybe we'll call it aggressive valuation," he said.

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