Magazine article The CPA Journal

Charitable Contributions Substantiation Requirements

Magazine article The CPA Journal

Charitable Contributions Substantiation Requirements

Article excerpt

On September 21, 1993, the IRS issued its publication l77l, Charitable Contributions Substantiation and Disclosure Requirements. The document is a result of RRA '93 and its provisions affecting tax-exempt charitable organizations. These included new substantiation requirements for donors and new disclosure requirements for charities.

Beginning in 1994, a deduction will not be allowed for a charitable donation of $250 or more unless the donor has contemporaneous written substantiation from the charity. The term contemporaneous means it must be received by the donor no later than the date the donor actually files a return of the tax year in which the contribution was made. The guidance from the IRS confirms that separate payments are regarded as independent contributions and are not aggregated for purposes of measuring the $250 threshold amount. However, the IRS warns that it is authorized to establish antiabuse rules to prevent avoidance of the substantiation requirements by taxpayers writing separate smaller checks on the same date. There is no prescribed format for the written acknowledgement and letters, postcards or computerized forms will be acceptable. The IRS stresses that the responsibility for obtaining this substantiation lies with the donor who must request from the charity. …

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