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Comment Now on IRS Proposed Charitable Gift Reporting Change

From Carol White, Associate Director of Operations —

The Internal Revenue Service (IRS) has released proposed regulations regarding the “contemporaneous written acknowledgement” requirement for contributions of $250 or more. Under current law, nonprofits must provide donors certain written documentation regarding receipt of donations, such as “the amount of cash and a description of any property other than cash contributed” and “whether any goods and services were provided by the donee organization in consideration for the contribution.”

The IRS is proposing that nonprofits, on a voluntary basis at this time, file an additional new information return with the IRS by February 28 every year and give a copy of it by that date to each contributor of $250 or more to substantiate the contribution. Among other things, the return would require the nonprofit to collect the donor’s Social Security number, an action which would impose other legal requirements on nonprofits to retain and protect those Social Security numbers from identify theft.

As this proposed regulation will affect all nonprofits if adopted as final, your input is valuable.

 The IRS is accepting public comments on the proposed rule change through December 16.   You may want to read some of the comments that have already been submitted.

Would you like to share thoughts on the proposal? Click here to read tips on submitting comments.

 The National Council of Nonprofits is evaluating the proposed regulations and is seeking input from nonprofits on how it would affect recordkeeping, privacy and other practices.

Note that a  mandatory version of this idea to improve taxpayer charitable cash contribution reporting compliance was considered and rejected in the past because the proposal raised legal, policy and confidentiality problems.