Final answer:
Tax preparers have a few options when a taxpayer claims a donation without proof: sending the taxpayer home to get proof, preparing the return without seeing proof, or preparing the return without giving credit for the donation.
Step-by-step explanation:
As a tax preparer, when a taxpayer tells you that they donated $50 to their church but did not bring proof of the donation, you have a few options. One option is to send the taxpayer home to get proof of their donation. This would ensure that you have the necessary documentation to support the deduction on their tax return. Another option is to prepare the return giving credit for the donation without seeing proof. However, this may be risky as the taxpayer should have proper documentation to support their claim. The third option is to prepare their return without giving them credit for the donation. This is the safest option from a compliance standpoint, but the taxpayer may miss out on a potential deduction.
When a taxpayer claims a deduction for a charitable donation without providing proof, as a tax preparer, the most responsible course of action would typically be option 1: Send the taxpayer home to get proof of their donation. This is because the Internal Revenue Service (IRS) requires a taxpayer to keep a record of any deductible cash or monetary gifts, no matter the amount. If the taxpayer wants to claim the deduction on their tax return, it is in their best interest to provide the necessary documentation to substantiate the claim. The preparer should maintain integrity and compliance with tax laws, therefore avoiding option 2, which could potentially involve filing a false return, and option 3, which might unjustly deny a legitimate deduction.