Charitable Contributions – Part 1

Church Law and Tax 1989-09-01 Recent Developments Charitable Contributions Richard R. Hammar, J.D., LL.M., CPA

Church Law and Tax 1989-09-01 Recent Developments

Charitable Contributions

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).

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay