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Substantiating Contributions of Property

Court rules "self-generated receipts" are not enough for substantiation requirements.

A taxpayer claimed a substantial charitable contribution deduction on his income tax return. The IRS later audited his return, and challenged his deduction. The taxpayer claimed that the deduction was for contributions of various items of property he had made to local churches. His only support for these contributions, however, were "receipts" bearing the churches' letterhead and on which he had written descriptions and values for the donated items. This was not enough to substantiate the contributions, the IRS concluded. A federal appeals court agreed. It noted that "the taxpayer offered 'tax receipts' bearing the charities' letterheads on which he listed the items donated and their values," and concluded that these "self-generated receipts" were too unreliable to support a charitable contribution deduction. Tokh v. Commissioner, 2001-1 USTC 50,128 (2001).

Key point. Churches and other charities ...

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Posted:
  • February 1, 2002

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