Academic journal article Journal of Accountancy

Charitable Deduction Erased by Statement's Omission

Academic journal article Journal of Accountancy

Charitable Deduction Erased by Statement's Omission

Article excerpt

The Tax Court upheld a disallowance of more than $22,000 of a couple's charitable contribution deduction solely for the lack of a contemporaneous statement from their church, the donee, that the couple received no goods or services in return.

The taxpayers, David and Veronda Durden, made the contributions by check, with most of the checks larger than $250, and claimed the amount as part of a $25,171 charitable contribution deduction on Schedule A of their joint return for 2007. The IRS disallowed the deduction, and the couple produced records of the contributions, including copies of canceled checks and a letter dated Jan. 10, 2008, from the church acknowledging $22,517 in contributions during the year. However, the IRS did not accept the acknowledgment because it lacked the required statement.

Sec. 170(f)(8) provides that, to be deductible, a money contribution of $250 or more must be substantiated by a contemporaneous written acknowledgment by the donee organization that indicates the amount and whether the organization provided any goods or services in consideration for the contribution and, if so, a good-faith estimate of their value. …

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