Tax language

The IRS has several publications that list the requirements for acknowledgements:  here is some basic information.

 

Written Acknowledgment

Requirement

A donor cannot claim a tax deduction for any single

contribution of $250 or more unless the donor obtains

a contemporaneous, written acknowledgment of the contribution

from the recipient organization. An organization

that does not acknowledge a contribution incurs no penalty;

but, without a written acknowledgment, the donor cannot

claim the tax deduction. Although it is a donor’s responsibility

to obtain a written acknowledgment, an organization

can assist a donor by providing a timely, written statement

containing the following information:

1.name of organization

2.amount of cash contribution

3.description (but not the value) of non-cash contribution

4.statement that no goods or services were provided by the

organization in return for the contribution, if that was

the case

5.description and good faith estimate of the value of goods

or services, if any, that an organization provided in

return for the contribution

6.statement that goods or services, if any, that an organization

provided in return for the contribution consisted

entirely of intangible religious benefits (described later

in this publication), if that was the case

It is not necessary to include either the donor’s social

security number or tax identification number on the

acknowledgment.

A separate acknowledgment may be provided for each single

contribution of $250 or more, or one acknowledgment,

such as an annual summary, may be used to substantiate

several single contributions of $250 or more.There are no

IRS forms for the acknowledgment. Letters, postcards, or

computer-generated forms with the above information are

acceptable. An organization can provide either a paper copy

of the acknowledgment to the donor, or an organization

can provide the acknowledgment electronically, such as

via an e-mail addressed to the donor. A donor should not

attach the acknowledgment to his or her individual income

tax return, but must retain it to substantiate the contribution.

Separate contributions of less than $250 will not be

aggregated.An example of this could be weekly offerings to

a donor’s church of less than $250, even though the donor’s

annual total contributions are $250 or more.

 

This publication, called “Charitable Contributions:  Substantiation and Disclosure Requirements” is available on the IRS website (www.irs.gov).  Your state may have its own rules as well, such as providing notice of where the organization is incorporated or how to receive copies of its financial statements.

 

Having said all that, we usually go with the briefest statement:  “Your gift of $X, less the value of goods and services received ($x), is deductible to the fullest extent of the law.”  What gets tricky is if the gift was made by a donor-advised fund or if there are special benefits to be disclosed.

_______________

 

Julie P. Hamre

Strathmore Hall Foundation, Inc.

5301 Tuckerman Lane

North Bethesda, MD  20852-3385

301.581.5136; fax 301.581.5201

www.strathmore.org

 

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Hi all -

We are reevaluating our acknowledgment process, and part of this involves the tax "language" at the bottom of the ack letter/receipt.  I am curious what other organizations are using on their receipts.  Also, are some organizations providing a letter AND a receipt?  Thanks in advance for any sample text you can provide.

-Lisa

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