I constantly get the question whether people can take a charitable deduction for their time spent on charitable activities. A recent case reinforces this idea.
A lawyer claimed a deduction for $25,000 for his time spend on pro bono (free and charitable) legal research. He came up with this figure by multiplying his hourly rate of $250 per hour by the number of hours he did work. He did prove his hourly fee and also kept a log as to the number of hours that he performed pro bono work.
Despite all of this documentation, the Tax Court reinforced the general rule that time spent on charitable endeavors are not deductible. Only actual cash spent or other costs incurred on behalf of a charity are deductible.
Also, on another issue, IRS is ramping up efforts on uncovering virtual currency transactions. IRS will be focusing on international tax schemes against fraudsters who use bitcoin and other virtual currency in order to evade U.S. taxes. IRS has issued subpoenas to most of the top currency companies who deal with virtual currency to turn over their lists of clients who have bought or sold virtual currency. Be aware of this if you are involved in any virtual currency.
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