Some dos and don'ts to keep you in the clear with the Internal Revenue Service and the FBI.
CLOCKWISE FROM LEFT: William"Rick" Singer walks into federal court in Boston. Actresses Lori Loughlin and Felicity Huffman are among 50 people charged in a college entrance exam cheating ploy. Stanford University sailing coach John Vandemoer and University of Southern California water polo coach Jovan Vavic were both implicated in the allegations.
Singer was also the chief executive of the Key Worldwide Foundation, which claimed to the Internal Revenue Service that it was a nonprofit charitable organization. But wiretapped phone transcripts released by the FBI purport to show the true purpose of the charity — to be the conduit for five- and six-figure bribes paid by parents. These parents allegedly include actresses Felicity Huffman, who starred on the TV show “Desperate Housewives,” and Lori Loughlin, who appeared as Aunt Becky on “Full House."
"Singer allegedly agreed with certain clients to disguise bribe payments as charitable contributions to the KWF, thereby enabling clients to deduct the bribes from their federal income taxes,” the Justice Department said. Charitable donations have to be made to qualified and legitimate organizations to claim a deduction. The parents in this alleged scheme seem to have doubled down on dumb by falsely reporting bribe payments as charitable donations.
For any contribution of $250 or more, you have to get a written description from the qualified organization that describes the property or quantifies the amount donated. The organization also has to indicate whether any goods or services were given in exchange for the gift. If so, you have to provide a description and estimate of the value of those goods or services, the IRS says.
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