IRS Attacks on Charitable LLCs Expand to Other Donations

The IRS has devoted lots of attention lately to taxpayers donating partial interests in so-called charitable limited liability companies.  It believes, right or wrong, that some situations are merely attempts to transfer assets on paper only, claim inflated charitable tax deductions, and avoid federal income taxes on investment gains.  This article by Partner Hale Sheppard examines congressional incentives for making charitable donations, early warnings about potential abuse using charitable LLCs, major IRS guidance identifying theories for challenging taxpayers, and pending Tax Court cases involving charitable LLCs.

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