Don't Lose Your Charitable Tax Deduction

Many years ago keeping canceled checks was often sufficient to prove a charitable deduction.  But the tax law was changed to require contemporaneous, written proof from the charity in order to deduct donations of $250 or more.  Not only must the charity provide a written receipt, but the receipt must contain the required information and statements in order to qualify the contribution as a deduction.  The receipt must contain the following elements:  

1.     State the amount of the contribution,

2.     Name the person making the donation,

3.     State the fact that either: i) no goods or services were provided by the charity in consideration for the contribution, or ii) provide a description and good faith estimate of the value of any goods or services provided by the charity,

4.     If the donor only received “intangible religious benefits,” then the receipt must explicitly state this, and

5.     The person seeking the deduction must receive the receipt no later than the due date of the original federal tax return (including any extensions obtained). 

If these five conditions are not met, then there is no tax deduction for the contribution.  These conditions have been strictly enforced by the IRS and by the court system with the result that some taxpayers have lost income tax deductions for very significant charitable contributions.

I have observed that some charities do not provide tax qualified receipts.  You should read your receipts to be sure that the required elements are contained.  If not, a corrected receipt must be obtained no later than the due date of your tax return. It is no longer sufficient just to be able to prove you made the donation.  You also have to prove that you received the tax-qualified receipt within the prescribed time limit. Substantial compliance is not good enough. S trict compliance with the rules is required. 

For non-cash donations, there are additional requirements, including the possible need for a qualified appraisal.  See Form 8283 and related instructions and also IRS Publication 526.