According to the latest IRS Statistics of Income Bulletin, Fall 2010 (www.irs.gov/pub/irs-soi/08inreturnsbul.pdf), more than 39 million individual taxpayers claimed deductions for charitable contributions of nearly $172 million on returns filed in the government’s 2008 fiscal year. There have been some interesting developments impacting charitable contributions for both individuals and businesses. Here is a roundup.
U.S. Supreme Court Okays State Tax Credits for Religious Schools. Arizona permits its taxpayers to claim a tax credit of up to $500 for contributions to school tuition organizations (STOs); STOs use the money to provide scholarships to students attending private schools, including religious schools. Some taxpayers sued the state department of revenue on the grounds that the tax credit violates the Establishment Clause of the Constitution. A district court dismissed the case on the grounds that the taxpayers lacked standing, but the U.S. Court of Appeals for the Ninth Circuit reversed. It held that the taxpayers had standing under Flast v. Cohen (392 US 83) to bring the claim. The state appealed to the U.S. Supreme Court, which issued its decision on April 4, 2011.
