Chip Taylor

SC DOR expands review of charitable donations

From the Greenville News:

COLUMBIA, S.C. (AP) -- The state Revenue Department is taking a closer look at taxpayers that may have inflated charitable contributions.

The state already has found land deals that raised questions. Now the tax agency its audit to other types of property, such as donations of art and buildings.

Burnie Maybank, the Revenue Department's executive director, first started looking into contributions of land using conservation easements after reading a 2002 Washington Post article about abuses in those donations.

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Maybank's audit found about $375 million in land easements had been claimed as charitable deductions from 1999 to 2003. Maybank says most were legitimate donations but some weren't. In June, Maybank testified before the U.S. Senate Finance Committee, saying that seven golf courses reported land they donated was worth a total of $125 million. One property alone was appraised at $40 million.

The Revenue Department says it found 10 pieces of donated property where owners should not have taken charitable tax deductions, including seven golf course. Maybank notes that five of those were in exclusive, gated communities.

Auditors found instance where a landowner bought property and within a year gave it to a land trust at more than twice the purchase price. On tax forms, people are supposed to declare what they paid, but Maybank says taxpayers often leave that part of the form blank.

The Revenue Department has told owners of a half-dozen golf courses they owe thousands in back state taxes. And the agency has notified 120 other South Carolina taxpayers that it has questions about their non-cash charitable deductions.

Maybank decided to widen the audit after the Revenue Department found some land owners donating other property to other charities besides land trusts. The Internal Revenue Service was asked for a list of all non-cash charitable deductions claimed by South Carolina taxpayers from 2001 to 2003.

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