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$65 Million Charitable Contribution Deduction Denied by IRS

Donor not entitled to a charitable contribution deduction because it was unable to meet the strict substantiation requirements

Last Reviewed: March 1, 2021
Key point. Charitable contribution deductions for contributions of noncash property are subject to various substantiation requirements. Failure to comply with these requirements can result in a loss of any deduction, even if there is no doubt that a contribution was made.

The United States Tax Court upheld the IRS's denial of a $65 million charitable contribution deduction because the written acknowledgment issued by the donee charity was not "contemporaneous" as required by the tax code.

On its 2007 tax return, a partnership claimed a charitable contribution deduction of $65 million. In order to substantiate a charitable contribution deduction of $250 or more, a taxpayer must secure and maintain in its files a "contemporaneous written acknowledgment" (CWA) from the donee organization. IRC 170(f)(8)(A). The CWA must state (among other things) whether the donee provided ...

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Posted:
  • April 20, 2017
  • Last Reviewed: March 1, 2021

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