Valuation misstatement penalty
An accuracy penalty that applies when a claimed value substantially or grossly exceeds the correct value of donated property.
Publication 561 carries a penalty section describing an accuracy-related penalty for overstating the value of donated property. It describes a 20% penalty for a substantial valuation misstatement and a 40% penalty for a gross valuation misstatement, with the tiers keyed to how far the claimed value exceeds the correct one.
The exact thresholds and the way the penalty interacts with reasonable-cause relief are set out in the publication, and they change what a careless round number costs. Read the penalty section before deciding that a generous estimate is harmless, and take an unusual valuation to a professional.
The defensive posture is straightforward: claim a range you can point to a source for, keep a photo, and note anywhere you overrode a suggested value. DeductiBee flags manual overrides in its exports for exactly this reason.
Sources
- Publication 561 (rev. December 2025), Determining the Value of Donated Property, full textIRS, IRS publication
- Publication 561, Determining the Value of Donated PropertyIRS, IRS publication
The rule as published, not tax advice; confirm anything that affects a return with a tax professional.
Related: Fair market value (FMV), Qualified appraisal, Condition tier, FMV factors. Browse every term.
Values with the source attached
DeductiBee applies a cited fair-market-value range to everything you donate, keeps the photo with the record, and exports a Form 8283 worksheet when you file.
