Church Members Denied Full Deduction for Donations to Their Church
Failure to meet substantiation requirements was the main factor, court says.

A married couple claimed a charitable contribution deduction of $4,100 on their federal tax return for contributions they made to their church. The only proof they had for their alleged donations was a photocopy of a "contribution receipt" from their church dated December 30 of the year in question, showing contributions during the year of $3,660. The receipt was generated by a computer word processing program and was not printed on an official letterhead of the church. The photocopy had the signature of the pastor and contained the stamped seal of the church. The IRS audited the couple's return and allowed a deduction of only $450 due to a lack of substantiation. The couple appealed to the Tax Court.

The court began its opinion by noting, "For contributions of money, taxpayers must maintain canceled checks, receipts from the donee organizations showing the date and amounts of the contribution, or other reliable written records showing the name of the donee, date, and amount of the contribution. Taxpayers bear the burden of proving they are entitled to deductions claimed."

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Posted: May 2, 2005
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