Mamaroneck School Board Nixes Charitable Fund For Tax Relief

MAMARONECK, NY — Property taxpayers in the Mamaroneck school district won’t be receiving any relief regarding itemizing state and local taxes on income tax returns, at least for the near future. The district board of education and administration, in consultation with legal counsel, researched the ability to establish a charitable fund in order to offer taxpayers the opportunity to reduce tax liability by up to 95 percent of the donated amount.

The district was looking into a charitable fund in response to the Federal Tax Reform Act, which was signed into law in Dec. 2017 and significantly reduced New York property owners’ ability to use state and local taxes as itemized deductions on individual income tax returns.

District officials said it will not be establishing a charitable fund at this time for two significant reasons.

“First, in connection with charitable fund regulations, the New York State Department of Taxation and Finance released the required acknowledgement form with language at the bottom of the form declaring that ‘no goods or services were provided in exchange for this donation’,” the district said in an email to community members.

The district’s legal counsel said that most likely the IRS will take the position that the taxpayer did received a good or service by way of the real property tax credits and reduction of tax liability.

Second, the district said that an IRS notice in May led legal counsel to believe that the IRS will not treat contributions to a charitable fund as charitable contributions for federal income tax purposes.

“Should the deductions be disallowed, penalties and interest could directly impact taxpayers,” the district said.

Over the course of the next year, the district will be monitoring the actions of the IRS and speaking with state elected officials to assess outcomes associated with charitable fund regulations.

District officials said they will revisit the option of establishing a charitable fund in the coming months.

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