The United States District Court for the District of Kansas has denied an estate tax charitable deduction for a testamentary charitable remainder trust based on the fact the trust did not conform to the requirements of section 2055 and a petition to reform the trust was not filed before the 90th day after the last date (including extensions) for filing the estate tax return.   MORE »

The U.S. District Court has permanently enjoined several tax return preparers from preparing returns for compensation based on the court's finding the defendants understated the tax due (and overstated the refunds due) on customers' federal income tax returns by claiming false and inflated itemized deductions for charitable contributions and employee business expenses.  MORE »

A federal grand jury has handed down a 37-count indictment against the head of a religious organization and related parties for conspiracy to defraud the United States and agencies thereof. The numerous allegations include a fraudulent charitable contribution and kickback scheme that resulted in claimed deductions of up to 20 times the amount actually contributed, international money laundering, mail and wire fraud, and filing false income tax returns.  MORE »

A U.S. district court has upheld the appraised value claimed by two businessmen who purchased medical equipment at a low price and then donated it to a hospital.  MORE »

A U.S. district court has held that a trust's direct, indivisible, and fixed distribution of money to a church renders section 2055(e) inapplicable, especially considering the good faith termination of the trust, thereby entitling an estate to a charitable deduction.  MORE »

The Justice Department has filed a complaint in U.S. district court against Xelan Inc., in which it alleges that Xelan and others allegedly sold abusive tax shelters to thousands of medical professionals. In one alleged fraudulent scheme, the defendants operate the Xelan Foundation as a donor-directed fund. The Foundation purportedly allows doctors to make tax-deductible donations, and then direct those donations to pay for the college tuition of the doctors' children (either as an outright payment to the college or university, or as a purported loan to the donor's child), or to pay the doctors for doing charitable, "pro bono," work.  MORE »

A California District Court has issued a temporary restraining order to freeze more than $500 million in bank and investment accounts of Xelan Inc., a firm allegedly running fraudulent insurance and charity schemes mainly for clients in the medical profession, according to a November 4 Justice Department release.  MORE »

In a Memorandum Opinion, U.S. District Judge William M. Nickerson has concluded the value of a 550-acre parcel donated by Marsh Mountain LLC to Garrett County Maryland Community Action, Inc. in 1998 was overvalued by $1.6 million. Although Marsh Mountain and its partners are liable for the tax consequences of the overvaluation, they are not subject to accuracy-related penalties.  MORE »

The U.S. District Court has ruled that The Thomas Kinkade Foundation Charitable Trust qualifies as a section 501(c)(3) organization effective from September 29, 1999, the date the foundation was created, and has ordered the IRS to issue a favorable determination letter.  MORE »

In a press release from the United States Attorney's Office for the Northern District of California, Tim Mosley of San Rafael, California has been sentenced to five months in prison followed by five months home detention and two years supervised release after pleading guilty to five counts of tax evasion and one count of filing a false corporate return. The taxpayer established a donor advised fund at the National Heritage Foundation and then instructed NHF to issue checks from his foundation account to the San Domenico Convent in San Anselmo, California. The gifts to NHF were reported by Mosley as charitable contributions; however, they were ultimately used to pay his children's tuition at a primary school run by the convent.  MORE »