Tax Court Denies Deduction for a Member's Contributions to Church
Court ruled church member failed to prove his contributions.

A church member ("John") claimed that he made charitable contributions of cash and property in the amounts of $37,000, $25,000, and $32,000 to his church in 1994, 1995, and 1996. The IRS audited John, and denied any deductions for charitable contributions during the three years under examination on the basis John's failure to substantiate any of his alleged contributions. John appealed to the Tax Court, claiming that he could deduct his cash contributions (each of which was less than $250) without any documentary proof. The court disagreed:

[A taxpayer] must substantiate the date, amount, and donee of charitable contributions of money with: (a) a canceled check; (b) a receipt from the donee organization; or (c) in the absence of a canceled check or receipt, other reliable written records …. A taxpayer with no canceled checks or receipts must verify charitable contributions with other reliable written records showing the name of the donee, the date, and the amount of the contribution. Factors showing whether a document (other than check or receipt) is adequate to substantiate a charitable gift include the contemporaneous nature of the writing, the regularity of the recordkeeping, and, for small contributions, the existence of any written document or other evidence from the donee organization which shows that it received the gift even if it is not a receipt; e.g., a button, emblem, or other token regularly given by the organization to a donor. [John] made no contributions by check and had no receipts for any cash contributions during the years in issue. He testified that he sometimes contributed cash anonymously so that a recipient could not identify him as the donor.

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Posted: April 2, 2001
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