INDIANAPOLIS – The Indiana Department of Revenue (DOR) encourages all Hoosiers to do their due diligence before donating to any charitable organizations to not only ensure the organization is legitimate, but that their contributions go where intended. As customers file their taxes this season, several are unfortunately realizing some of their charitable giving did not qualify for tax deductions. Why? Because the organization never existed.
“When Hoosiers donate their hard earned dollars to organizations they believe in or causes they are passionate about, the first step in that process is checking to ensure their money is going toward the cause they wish to support,” cautioned Commissioner Adam Krupp. “If you’re not familiar with an organization, please be sure to perform some quick research before donating.”
DOR has several tips to help individuals choose a reputable charity:
- Check with the IRS on charity legitimacy. Ask the charity for their Employer Identification Number (EIN). The EIN can be used in the IRS search tool for tax exempt organizations to verify their status at irs.gov/charities-non-profits/exempt-organizations-select-check.
- Don’t share any personal or financial information. Keep Social Security numbers, passwords or financial information, such as credit card numbers private. Scam artists will use this information to take money or steal the victim’s identity.
- Don’t give or send cash. Be sure to send a check or use a credit card once the charity has been verified, and keep that as record of your donation for security and tax record purposes.
- Consult the IRS publication on charitable contributions, available at irs.gov/pub/irs-pdf/p526.pdf. This free booklet describes the tax rules that apply to making tax-deductible donations and provides complete details on what records taxpayers need to keep.
Another common type of charity fraud that often happens involves scams that occur during or after a significant natural disaster. Scam artists impersonate charities to get money or private information from individuals. Beware of any organization that is not a recognized charity established to help disaster victims.
Fake charity scams can be reported to the Federal Trade Commission at www.ftccomplaintassistant.gov/#crnt&panel1-1.
