Charitable contribution problem in SC

[Ken Frye]

What is the name of your state?South Carolina
My wife is disabled and with the help of our insurance we purchased an electronic wheelchair in 1996. We paid 800 dollars and the insurance paid the rest, about 4000 dollars. In 2001 we donated the wheelchair to a qulified charity. The fair market value, according to the company that sold us the chair, was 2500 dollars which is what we claimed as a deduction. This past October we received a audit notice from SC. We provided all forms and paperwork requested. After some time we were notified that the state was disallowing not only the wheelchair donation but all of my wife's disability, mileage for delivering pizzas, and our church donations. After some time back and forth with different supervisors, the matter of the disability and church donations were resolved but the pizza delivery miles were cut in half because there was no way to prove any mileage compensation provided by the employer and the 2500 dollar wheelchair donation is still being disallowed based on a court decision. (Rev. Rul. 70-498, 1970-2 CB 6--IRC Sec. 61) However, the 800 dollars we paid will be allowed as the deduction.
I have done my own taxes for 30 years and have never heard that changes can be made on your taxes based on court decisions without changing the tax rules. How can one prepare taxes accurately without a full set of tax law books and a computer program to search every possible scenario? I prepare my taxes with the TaxSlayer program on line and I do not cheat even though it is easy to do.
Question 1;
Is SC Dept. of Revenue correct in thier assessment that the wheelchair is not deductable?
Question 2;
Is SC Dept. of Revenue correct in cutting my pizza delivery miles in half?
Question 3;
Is TaxSlayer responsible for the possible additional tax that will be incurred?
Please help. Thanks

 

[Snipes5]

No, Taxslayer is not responsible for your additional tax, unless their paperwork agrees to that responsibility.

The court has the final say on interpretation of the tax code. The IRS loves to just put their own interpretation on things, until someone challenges it.

If you don't like the position SC took at audit, get yourself a Tax Professional to assist you. An audit is not something a taxpayer should attempt without professional representation.

An Enrolled Agent can go a long way towards straightening this out.

An audit does not mean they are accusing you of cheating on your taxes, they are merely accusing you of being inaccurate.

Snipes

 

[abezon]

1. Your deduction for donations is limited to your basis. Since you paid only $800, that's your max deduction.

2. Deductions are allowed IF you can prove them. Since you didn't keep any records of the miles driven for charitable purposes, you're lucky SC is allowing you anything.


BTW, if SC is auditing you, you should brace for an IRS audit as well.