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Charitable Contribution Substantiation & Reporting |
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As we near the end of another calendar year, charitable organizations will again be receiving those last minute donations as well as having to provide documentation for donors. Two General Rules an organization needs to be aware of regarding documentation (as provided in IRS Pub 1771):
- A donor must obtain a written acknowledgement from a charity for any single contribution of $250 or more before the donor can claim a charitable contribution deduction; and
- A charitable organization must provide a written disclosure to a donor who makes a payment in excess of $75 partly as a contribution and partly for goods and services provided by the organization.
Written Acknowledgement
It is the donor’s responsibility to obtain written acknowledgement of a contribution of $250 or more; however, the charitable organization can assist by providing a timely, written statement. The donor must have the acknowledgement by the earlier of the date on which the donor files his individual return or the due date of the return. The statement must contain the following:
- Name of Charitable Organization
- Amount of a cash contribution
- Description (but NOT the value) of any non-cash contribution
- Statement that no goods or services were provided by the organization in return for the contribution; or
- Description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution; or
- Statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits.
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Bush signs American Jobs Creation Act of 2004
On October 22, President Bush signed the American Jobs Creation Act of 2004. This act’s most publicized provisions related to the repeal of the exclusion for extraterritorial income (ETI); however, the act touches just about every facet of federal income taxation. Some provisions of interest to individuals and small business owners include (1) limitation of cost of a sport utility vehicle (SUV) that may be expensed under Sec. 179 to $25,000; (2) election for taxpayers to take an itemized deduction of either state and local income taxes or state and local sales taxes; (3) Allowance of deduction of first $5,000 of start-up and
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| Lobbying & Political Campaigning – What every Tax-Exempt Organization should know
As the political campaign season winds to a close and we get ready for a new legislative year, there are several rules that exempt organizations should be reminded of related to lobbying and political campaigning.
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EO Enforcement a Priority
The new director of the IRS Exempt Organization’s Division has made improving the division enforcement programs a priority.
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IRS sends delinquency notices
The IRS has mailed a large number of delinquency notices to exempt organizations who have failed to file returns. These notices are sent 4 to 5 months after a return is due if no return or extension has been filed.
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IRS issues revised Form 1023
At the end of October, the IRS issued a revised Form 1023 – Application for Recognition of Exempt Status under Section 501(c)(3).
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| Update on Class Action Lawsuits against Nonprofit Health Systems
Two significant items have developed in the ongoing class action lawsuits that were filed against 48 nonprofit health systems since June.
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