21 OCT 2024 / IRS UPDATES

Heads Up on Charity Scams from IRS This Season

In light of the devastation caused by Hurricanes Milton and Helene, along with other recent natural disasters, the IRS is urging everyone—especially those in the fields of finance, tax, and accounting—to remain vigilant against charity scams. Fraudsters often exploit disaster situations, setting up fake charities to deceive well-meaning donors and gather sensitive personal and financial data.

For professionals advising clients, this is a key moment to reinforce best practices in charitable giving. IRS Commissioner Danny Werfel highlighted, "Criminals too often prey on the generosity of people during difficult times. You should never feel pressured to donate. Always verify the authenticity of a charity first."

The IRS encourages the use of its Tax-Exempt Organization Search (TEOS) tool, which allows individuals and professionals to confirm whether a charity is legitimate, tax-exempt, and eligible to receive tax-deductible donations. The TEOS tool also provides detailed information on a charity’s status and filings—crucial for ensuring compliance and avoiding fraud.

In addition, finance professionals can advise their clients to avoid charities that request donations via wire transfer or gift cards—clear indicators of scams. Using secure payment methods, like credit cards or checks, is always a safer option after verifying the charity’s legitimacy. And remember to keep information like your Social Security number, credit card info, or PINs to yourself.

Don’t forget to snag a deduction for all good deeds, but only if the charity is a legit tax-exempt organization recognized by the IRS. So, make sure you itemize those deductions!