It’s that time of year and here are three of our favorite tax tips to navigate the 2020 tax year:

1. See the opinion in Sells v. Commissioner of Internal Revenue, a Tax Court decision issued earlier this year for a reminder about the importance of obtaining a qualified appraisal for transactions in order to secure a charitable deduction, as well as evidence that the IRS will continue its scrutiny of conservation easements. On the positive side for the taxpayer, this ruling is an illustration of the type of cases that the IRS may agree to abate some penalties, even those related to the taxpayer’s misvaluation. 

2. If you’re having trouble keeping up with changes to the tax laws, you aren’t alone. We highly recommend the Wall Street Journal’s recently-released tax guide for explanations. Kiplinger also offers a helpful summary of the changes effective for tax year 2020.

3. Skim the examples in Private Letter Ruling 202107012, released on February 19, 2021, to remind you of the types of activities that are deemed to go beyond the Internal Revenue Service’s definition of “charitable and educational” for qualification as an exempt organization under Internal Revenue Code Section 501(c)(3). Note: Holiday parties, outings to restaurants and bars, car shows, and other social gatherings can tip the scales against exemption, even if those activities are conducted in connection with fundraising and collecting in-kind donations for charitable causes.