Background. A taxpayer accumulated a "garage full" of obsolete computer equipment over several years. In order to eliminate this clutter, he donated all the equipment to a church. He claimed a charitable contribution deduction on his tax return in the amount of $15,320 for this transaction. The IRS audited his tax return, and requested substantiation of the contribution. The taxpayer provided a copy of a receipt, purportedly from the church, for $15,320. The IRS disallowed the entire contribution, and the taxpayer appealed to the Tax Court. The court concluded that the church's "receipt" was inadequate substantiation for three reasons:
- The taxpayer failed to prove that the church was a qualified public charity to which deductible contributions could be made. In particular, the court noted that the church had never applied for recognition of exempt status with the IRS.
- Even if the church was a qualified charity, its receipt did not contain the necessary information to adequately substantiate the contribution. The receipt "purported to substantiate a contribution and did not indicate that any noncash contribution had been made. If the taxpayer had made a noncash contribution as he testified, the receipt should have described the location of the contributions and the property contributed. The receipt also should have stated whether the donee provided goods or services as a quid pro quo. The receipt did not provide any of the information necessary to substantiate the contribution that the taxpayer testified he made."