• The Tax Court ruled that a church member was not entitled to a charitable contribution deduction on her income tax return for the portion of her cash contributions to her church which were not supported by cancelled checks, a receipt from the church, or other written records. The taxpayer claimed $1,150 in contributions to her church in 1983 and $1,500 in 1984, but she only had cancelled checks to prove contributions of $120 in 1983 and $472 in 1984. She did not keep any record of the balance of her alleged contributions but relied solely on her memory as to the amounts contributed. She was unable to obtain a receipt from her church because the records were not available due to a dissolution of the church. The IRS ruled that the taxpayer was entitled deductions of only $120 in 1983 and $472 in 1984—the amounts that she could document. The Tax Court agreed, relying on income tax regulations that required cash contributions to be supported by (1) a cancelled check, (2) a receipt from the church showing the name of the church and the date and amount of each contribution, or (3) in the absence of a check or receipt from the church, “other reliable written records” showing the name of the church and the date and amount of each contribution. In other words, if a donor does not have cancelled checks of a church receipt documenting contributions made to the church, then he or she must prove the contributions by using reliable written records. Oral testimony or “memory” is not enough. The regulations specify that factors indicating that written records are reliable include (1) the “contemporaneous nature of the writing evidencing the contribution” (i.e., the written evidence supporting a contribution is dated at or near the time of the contribution), and (2) the “regularity of the taxpayer’s recordkeeping procedures” (i.e., a diary entry stating the amount and date of a contribution by a taxpayer who “regularly makes such diary entries”). The Tax Court concluded that the taxpayer’s memory or oral statements regarding the amounts of her contributions to the church failed to satisfy the substantiation requirements of the income tax regulations and accordingly her claimed contributions were not deductible to the extent they were based on such evidence. McFadden v. Commissioner, 57 T.C.M. 152 (1989).

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