Claiming Charitable Donation Deductions – What Donors and Charities Need to Know.

Donors:

When making a charitable donation of cash or property of $250 or more, it is the donor’s responsibility to prove entitlement of a deduction.   The charity should provide a contemporaneous written acknowledgement (CWA) of your donation – either at the time of donation or by sending all CWAs at the end of the year – but in the end, the taxpayer bears the burden of proof.  This documentation – a receipt of sorts – must contain three pieces of information.

1. The amount of cash and a description of any property contributed.
2. A statement as to whether the donor received any goods or services in return for the donation.
3. A description and estimate of the value of any goods or services provided to the donor.  

Additionally, CWAs must be submitted to the donor on or before the date of the donor’s tax return for the year the contribution was made is filed, or the due date (including extensions) of the return, whichever is earlier. 

If you make a donation of less than $250 to a charity, you do not need a CWA.   For example, donations of $200 three times during the year would not require a CWA to claim the deduction even though the total contribution to the charity exceeded $250.

Charities:

While the burden of proof lies with the taxpayer, it is in the best interest of the charity to provide donors with all the necessary documentation whether they ask for it or not.  We encourage charities to send valid CWAs to donors throughout the year; however, no later than January of the following year.

Related Article:   Tax Tip: 9 Things the IRS Wants Taxpayers to Know About Charitable Giving