In 2004, ESPN's Kirk Herbstreit and his wife donated their house to the local fire department for the purposes of fire training. After the donation, the Herbstreits took a $330K deduction on their tax return.
The IRS audited their return....and rejected the deduction; assessing $134,606 in back taxes and interest.
The IRS position in many of these cases is that the homeowners are donating merely the structure and not the land. I'm sure the homeowner for his part deeded over the entire interest and would never agree that the land wasn't the part of the deal.
The Herbstreits paid the taxes and interest and are now suing for the return of the money.
