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IRS Considering New Donation Documentation Standard

IRS Considering New Donation Documentation Standard

The IRS currently requires donors to a 501(c)(3) to have a receipt from the charity for any gift above $250 in order for that gift to be tax deductible.  According to a post in Bloomberg BNA, the IRS is considering a significant change to that requirement.

The reason for the proposed change stems from donors who argue that larger gifts above $5,000 are already being reported by the charity on Form 990, Schedule B.  They contend that the organization’s return listing the donor’s gift should count as substantiation if the donor cannot produce a receipt.

In the new proposal, the IRS will produce a specific-use form that the charity can optionally report detailed gift data.  That “donee report,” if filed by the recipient, would serve as a de-facto receipt for tax purposes in the event of an IRS audit.

For more information, see the original article at Bloomberg BNA.

Greg McRay, EA

Greg McRay is the founder and CEO of The Foundation Group. He is registered with the IRS as an Enrolled Agent and specializes in 501(c)(3) and other tax exemption issues.

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