When disaster strikes or a cause tugs at our heartstrings, it's a natural instinct to want to help. Americans are known for their generosity, especially in times of need. However, it's crucial to ensure that your hard-earned money is going to legitimate charities and not into the pockets of scammers. In this blog post, we'll share some valuable tips from the IRS to help you make informed decisions about charitable giving.
The Importance of Due Diligence
Sadly, not everyone has good intentions. Scammers often exploit people's goodwill, especially during emergencies or disasters. They may pose as employees of legitimate charities or even federal agencies to trick well-meaning individuals. That's why it's essential to be cautious and do your homework before making a donation.
Tips for Donating Wisely
Verify the Charity
Use the IRS Tax Exempt Organization Search: This tool allows you to find or verify qualified charities. Donations to these organizations may be tax-deductible.
Research before Donating
Take some time to confirm that the charity is real and learn whether your donation is tax-deductible.
Keep Records
Always ask for a receipt and keep a record of your donation and check your bank and credit card statements to ensure the donation amounts are accurate.
Red Flags to Watch Out For
Payment Methods
Legitimate charities do not ask for gift cards, cash, or wire transfers.
Caller ID Spoofing
Be cautious if the caller ID shows a legitimate organization but you weren't expecting a call. Scammers can change their caller ID to deceive you.
Vague Claims
Scammers often make vague and sentimental claims without giving specifics about how your donation will be used.
Bogus Websites
Be wary of websites that have names similar to real charities. Always double-check the URL.
Tax Deductibility
Some organizations falsely claim that donations are tax-deductible when they're not.
For Disaster Victims
If you're a victim of a disaster and have questions about tax relief or disaster-related tax issues, you can call the IRS disaster assistance line at 866-562-5227.
Conclusion
Charitable giving is a noble act, but it's essential to make sure your contributions are going to the right place. As a CPA office, we understand the importance of financial integrity and are here to assist you in making wise decisions about charitable donations. If you have any questions or need help verifying a charity's legitimacy, feel free to reach out to us. Let's make sure your generosity truly makes a difference.
For more information on charitable contributions take a look at Topic No. 506, Charitable Contributions | Internal Revenue Service (irs.gov).
We hope you found this information useful. Stay safe and give wisely!
This blog post is brought to you by Laurie E. Rust, CPA, where we're not just about numbers; we're about making sure your financial decisions count.
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