The Pension Protection Act of 2006, signed into law in August 2006, was designed to help Americans protect and grow their retirement savings. The act includes discussion about tax incentives and regulations for pension and charitable giving reform.
Those who engage in charitable giving are eligible for tax deductions, and there are rare cases in which charitable giving moves a donor down a tax bracket, which would require that they pay fewer taxes. Part of the Pension Protection Act of 2006 was designed to strictly regulate this process. Since the act was signed into law, the IRS requires charitable donors to arrange for an appraisal of the possession to be donated and submit a substantiated and certified appraisal report when filing their tax statements. It also specifies that the appraiser the donor engages must be Uniform Standards of Professional Appraisal Practice (USPAP) certified.
The Pension Protection Act asks appraisers and charitable donors to share responsibility for an accurate appraisal. The charitable donor is responsible for supplying the necessary paperwork to the IRS proving that his or her responsibility was fulfilled, and the appraiser can expect punishment from the IRS if he or she artificially inflates the value of the charitable donation.
If you are planning on making a non-cash charitable donation of an item worth more than $5,000, make sure that you first have it appraised by a reputable and certified appraiser.
