Charitable Contributions

Church Law and Tax 1989-05-01 Recent Developments Charitable Contributions Richard R. Hammar, J.D., LL.M., CPA

Church Law and Tax 1989-05-01 Recent Developments

Charitable Contributions

The IRS is becoming increasingly concerned about donors who claim charitable contribution deductions for “gifts” to charity for which they receive a “premium” in return. IRS Commissioner Lawrence Gibbs recently warned that if charities do not begin properly notifying donors that such “contributions” are not fully deductible, then Congress may be forced to enact legislation requiring that such notice be given. Gibbs cited an “alarming number” of misleading solicitations. No charity has yet lost its tax-exempt status because of a failure to properly notify donors that contributions for which a premium are received are not fully deductible, but Gibbs did suggest that the IRS might apply section 6701 of the Internal Revenue Code to such charities. Section 6701 imposes a penalty of $1,000 upon a person or organization that “aids and abets” in the understatement of another’s tax liability. The $1,000 penalty may be assessed against a charitable organization for every donor’s tax return that understates tax liability because a full charitable contribution deduction was claimed despite the donor’s receipt of a premium from the charity. This issue was discussed fully in a feature article in the November-December 1988 issue of Church Law & Tax Report.

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
caret-downclosefacebook-squarehamburgerinstagram-squarelinkedin-squarepauseplaytwitter-square