Strict Standards for Charitable Contribution Documentation

A recent Tax Court decision highlights the IRS’ tough stance on exactly what taxpayers must have in the way of documentation in order to substantiate their charitable contributions.

In Durden, TC Memo 2012-140, the taxpayers found out the hard way that proper, complete, and (most importantly) contemporaneous written acknowledgement by the charity is what IRS insists on.

IRC Section 170(f)(8)(A) requires this for all contributions of $250 or more.

The Durdens claimed a charitable contribution deduction in 2007 for $25,171, primarily for contributions to their church, and almost all of the components of which were checks for amounts larger than $250.

It’s not enough to show the IRS the cancelled checks – they want, as the Code requires, the contemporaneous acknowledgement letters from the charity/charities to whom the taxpayer made the contributions.

Result in this case – deductions disallowed.