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For 2021, my charitable deductions are considerably greater than my AGI, reducing my tax owed to zero or a relatively small number.

Is there a tactic that will reduce the likelihood that this will trigger an audit? 90% of the charitable deduction was to my school. I thought of including the letter of acknowledgment from my school along with my return. Is this tactic likely to be effective, or to the contrary, might it just raise a red flag?

I am asking for an assessment of probability from knowledgeable people, not just for opinions.

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  • Are you sure AMT won't rear its ugly head?
    – Jon Custer
    Commented Feb 8, 2022 at 23:21
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    @JonCuster charitable contributions are deductible for AMT as well IIRC
    – littleadv
    Commented Feb 8, 2022 at 23:34
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    You can't take charitable deduction over 60% of AGI, and for noncash property or certain donees even less; any excess can be carried-over and used in up to 5 subsequent years. See pub 526 at "Limits on deductions" et seq (note the revision for 2021 isn't out yet, and the 2020 version has an option to use 100% for cash contributions made in 2020 which does not apply to your case).
    – dave_thompson_085
    Commented Feb 9, 2022 at 6:13
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    @dave_thompson_085 CARES act allows up to 100% deduction for charitable contributions for 2020 and (as expanded in CAA) 2021. See CARES Act Sec 2205 and CAA of 2021 Sec. 213. I posted a link to the IRS announcement on the matter in response to your similar comment in OP's other question.
    – littleadv
    Commented Feb 9, 2022 at 17:04
  • @littleadv Thanks for making it clear that, for 2021, charitable deductions of 100% of AGI still apply. Another point to mention is that the allowable ceiling of 30% of AGI for stocks and some other non-cash contributions still applies.
    – ab2
    Commented Feb 10, 2022 at 23:39

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I don't think that proactively adding any documentation would necessarily reduce the risk of audit, since the revenue agents will only look at it after the audit was started anyway. If they started looking at it - just let them request whatever they deem necessary. Usually less is more, only provide information explicitly requested.

That said, you should definitely have a contemporary letter of acknowledgement that includes the required language and shows the dates and the amounts of the contributions to the organization. You should also make sure that the organization is in fact charitable.

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  • Thank you, but I would have not have contributed if there were any doubt that MIT was a legitimate deduction. Again, thanks.
    – ab2
    Commented Feb 8, 2022 at 23:08
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    @ab2 I'm sure, but these answers are intended to also serve others with similar questions :) In any case, you might need to have the documentation that the organization is in fact charitable, for audit, even if it is a common knowledge. Just have it.
    – littleadv
    Commented Feb 8, 2022 at 23:11

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