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Still No Relief for Substantiation of Charitable Donations of $250 or More

Berdon Tax Team 02.18.2016 | eVisor

Responding to thousands of negative public comments, the IRS has withdrawn proposed regulations that would have permitted charities to file a new information return by February 28 each year to substantiate charitable contributions of $250 or more in value.

The new "Donee Report" would have required nonprofits to collect information, including donor social security numbers, which was viewed as exposure to an increased risk of identity theft. Combined with increased costs and burdens on nonprofits, the cons were deemed to outweigh the pros and the new information reporting proposed for these donations has been scrapped.

At this time, there are still no procedures for the implementation of the statutory exception to the contemporaneous written acknowledgement requirement for substantiating charitable contribution deductions of $250 or more.

For those who have made charitable donations in 2015, if you don't meet IRS substantiation requirements for a donation, the IRS could deny the corresponding deduction you're claiming. To comply, generally you must obtain a "contemporaneous" written acknowledgment from the charity stating the amount of the donation, whether you received any goods or services in consideration for the donation, and the value of any such goods or services.

There is still time to receive substantiation for all of your 2015 donations: "Contemporaneous" means the earlier of 1) the date you file your tax return, or 2) the extended due date of your return. So as long as you haven't filed your 2015 return, you can contact the charity and request a written acknowledgment - you'll just need to wait to file your return until you receive it. (But don't miss your filing deadline; consider filing for an extension if needed.)

Questions? Contact your Berdon advisor. Berdon LLP, New York Accountants

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