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Our review of the materials and information that petitioners
submitted to respondent with their returns reveals that important
information that would have enabled respondent to understand and
monitor the claimed contributions was not supplied. Congress
mandated the reporting information so that the Internal Revenue
Service (IRS) could monitor and address congressional concerns
about overvaluation and other aspects of claimed charitable
contribution deductions. The submission of the information is
prerequisite to petitioners’ entitlement to a charitable
contribution deduction. Petitioners’ failure to substantially
comply or otherwise provide respondent with sufficient
information to accomplish the statutory purpose compels our
conclusion that respondent properly disallowed petitioners’
claimed noncash charitable contribution deductions.4
Section 183 Activities
Rance and Zane each claimed losses that respondent
disallowed as being from activities not engaged in for profit
within the meaning of section 183. If an individual engages in
an activity but does not engage in that activity for profit, “no
deduction attributable to such activity shall be allowed under
this chapter except as provided in * * * [section 183].” Sec.
183(a). Section 183(b)(1) permits deductions which are otherwise
4 Our holding that petitioners are not entitled to the
noncash charitable contribution deduction renders it unnecessary
to decide the value of the contributed interests.
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Last modified: March 27, 2008