With the deadline for 2006 tax-deductible charitable contributions approaching, we recently alerted many of our clients and friends about a change in the Internal Revenue Code. Because of the wide-ranging effect of this change, we feel compelled to bring it to the attention of the general public.
A few months ago, Congress passed another new tax law, known as the Pension Protection Act of 2006. Buried within this 800-page law is a small but very important provision affecting us all – the deduction allowed for the charitable contribution of used socks.
First of all, no deduction is to be allowed for a contribution of clothing that is not in “good used condition or better”. The word “better” is not described further but perhaps could be attributed to socks that were received on Father’s Day but were never introduced to the recipients feet. In addition, the IRS may now deny a deduction for any item with minimal monetary value, such as used socks. We questioned the right of the government to determine the value of such a personal item. What if the socks have holes in them, making them easier to put on? Does that not add value? And suppose they actually match?
Our questions were not well received. The IRS representative told us to “keep your socks on”‘ and terminated the conversation. A call to the representative’s supervisor revealed that this was just a figure of speech and that we could take them off and donate them if we wished.
If you have any questions regarding year-end charitable contributions (of used socks or otherwise) please give one of our professionals a call.