Tis The Season For Contemporaneous Written Acknowledgements

The IRS issued an unusual email clarification this week in order to reassure charitable organizations that they are not required to comply with new proposed regulations regarding substantiation of charitable gifts of $250 or more. Rather, the new proposed substantiation procedure is an alternate substantiation method to the contemporaneous written acknowledgement that organizations use currently. In fact, the IRS states in its email that it expects the vast majority of charitable organizations to continue to substantiate their donations of $250 in the same manner they have in the past – with a contemporaneous written acknowledgement to donors. This new system would only impact those that elect to report this way and is not mandatory.

The IRS also sought to calm fears about identity theft related to the new form for donee reporting, which will contain taxpayer identification numbers and will be submitted to both the donor and the IRS. The IRS stated that the taxpayer identification numbers are necessary to properly associate the donation information with the correct donor, but that the form sent to each individual donor will only contain that donor’s information and not that of any other donor.

The comment period on the proposed regulations is open until December 16, 2015, and the IRS says that it welcomes comments and concerns. The new alternative donee reporting system and associated form will not available until final regulations are issued.

For a more detailed discussion of the current requirement for a contemporaneous written acknowledgment and the alternate donee reporting procedure under the proposed regulations, see our November blog post on this topic.

See Our Services