Errors in Charitable Deduction Limits Worksheet

[despenla]

(updated 3/14)

1.  The Charity Limit 1 form is not created in some circumstances.  This can prevent verifying the calculations.

2.  When it is generated, the Charity Limit 1 Form does not conform to the format and line by line content in IRS Pub 526 (2021).  This will definitely cause problems when submitting data.

3.  Line 39 of the Current Year Contributions Worksheet (Charity Limit 1 form), the calculation uses line 10 from the Charitable Deduction Limits Worksheet for CARRYOVER CONTRIBUTIONS  (Charity Limit 2 form), instead of Instead of calculating with line 10 from the same form.   This results in a severely wrong result.

4.  The Current Year Contributions Worksheet (Charity Limit 1 form), uses a limit calculation to cap the TOTAL amount of charitable contributions at 100% of AGI but the IRS only accepts 60%.   This was also missing in the 2020 Business Version download.  

NOTE: As a result of #4, I received extra taxes and penalties from the IRS.  TT claims to be 100% guaranteed but the TT calculation was not accepted by the IRS.  I have submitted a complaint but the IRS is non-responsive.  I need to talk with someone about what Intuit will do to defend me against the IRS, or pay my penalties and tax.

[despenla]

@RaifH 

I see you are very experienced with topic in this area.  I would really like to be able to discuss this issue #4.

It has cost me a great deal of time to locate exactly where the difference of 'opinion' is between the IRS and us.

Would it be possible to discuss this by phone?  I have tried to find a way to submit a claim against the 100% Guarantee, but cannot find a way.  The IRS rejected the efile 4 months after submission.  I need some help from your team.  Please.

[mike s2]

I'm not a tax expert but I have read articles suggesting that eligible cash donations (there are restrictions I think) in 2020 and 2021 were entitled to deduction at the 100% AGI level as a result of pandemic relief legislation.  Perhaps someone will correct me if there's more to say, but I believe that the default position in TurboTax (at least on my web version) was to presume that taxpayers wanted to deduct at that 100% level; there were/are ways to not elect this option and use the "normal" deduction limits if someone thought it more advantageous to carryover to future years and apply the deductions to income taxed at higher rates in future years.  You might want to research this topic in considering whatever issue you are encountering as it is complicated (at least to me!) and I'm far from being an expert.

[despenla]

@mike s2 Thanks Mike!  I appreciate having the chance to dialog with someone about this. It is complicated, but you are right.  The IRS changed the prior 60% limit to 100% as a part of the CARES Act for 2020 taxes.  TT was not supporting it in 2020 at first but they added it in April. I used it in 2020 and the IRS denied it, even though it is plainly written in their documents, Pub 526.  They still have not responded to the complaint that I filed, so I am left hanging out in space for this year.  The 100% is available this year also, as an option as you said.  I want to use up as much of the carryover that I can, since I am not sure if they will continue to honor this, or claim to honor it, as the CARES act may expire.

I am trying to decide if I should wait (indefinitely) for the IRS to respond to my 2020 complaint before filing 2021, or revise my 2020 filing (reverting to 60%) before filing 2021, or just go ahead with 2021.   Since they denied 40% of my 2020 deductions, it threw me into a higher tax bracket which I would like to recover, but it is taking a lot of time to research and recalculated 6 different ways, as I have had to do.

Sorry for blathering on, but your willingness to share ideas and advice has been very encouraging to me. Thanks for taking the time to share your ideas.

[despenla]

@Mike_s2

Just to close this issue, the IRS finally agreed that I was right and refunded the excess payment which they imposed on me, even though it took them15 months to admit it and another 3 months to refund the money!

 TT was also wrong in their calculations of how to use carryover charitable donations for 2021 but I have not followed up on weather they have fixed their issue or not, as I no longer have carryover charitable contributions of any significance.

David