Question

Michael and Jan filed their 2018 tax returns (married filling jointly). In total, they made $25,000.00 in cash contributions to a qualified charitable organization in 2018, but did not receive a receipt for that organization and did not keep any records of those contributions themselves. In 2019, they were notified by the IRS that their 2018 return was selected for examination and audit. Based on these facts and the requirements of charitable deductions, will the IRS allow this deduction? Why or why not?

Answer 1

In the given case, Michael and Jan does not have any record of the donation with them. And their return has been selected for the examination and audit. Proof of charitable contributions evidences to the taxing authorities that an assessee has indeed made a charitable donation to a qualified organization. Evidence of charitable contrubution refers to the substantiation required by the Internal Revenue Service (IRS) for an assessee to claim a donation of money.

Proof can be an official receipt or invoice from the receiving organization and also includes credit card statements or other financial records detailing the donation.

In the U.S., IRS requires proof for any contributions greater than $250 in cash or $500 in non-cash items. Non-cash items valued over $5,000 must also come with an expert appraisal.

IRS accepts, acceptasb proof in form of bank statements, payroll deduction records and written statements from the charity containing the charity’s name, contribution date and amount.

For contributions of $250 or more, the charity must also specify whether it provided the donor with any goods or services in exchange for the gift.

Taxpayers claiming a deduction for more than $500 in non-cash contributions must also fill out IRS Form 8283 and file it with their annual tax return.