In Friedman v. Commissioner, TC Memo 2010-45, the Tax Court denied the taxpayers claimed charitable contribution deductions for the donation of equipment. The Tax Court found that the taxpayers did not strictly comply with the substantiation requirements of Section 1.170A-13, Income Tax Regs. On the otherhand the taxpayers contend their documentation satisfied the substantial compliance doctrine according to Bond v. Commissioner, 100 T.C. 32, 40-41 (1993). The Tax Court found that the taxpayers did not establish substantial compliance because they did not provide adequate descriptions of the equipment and did not identify the valuation methods used, the manner of acquisition, and the cost bases of the equipment.
The Tax Court further held that the taxpayers' documentation did not satisfy the requirement of Section 170 of the Internal Revenue Code in that the taxpayers did not obtain contemporaneous written acknowledgments of the donations.
Penalties under Section 6662(a) of the Code were also imposed.