Charitable Cash Donation Deductions Now Require Proof

Blueprint for Financial Prosperity scrutinized the new IRS rules about charitable donations and found an important change.

Starting January 2007:

“…you can only deduct cash donations if you have proof: canceled check, credit card statement, or a written receipt from the charity itself. For the written receipt, it must have the name of the charity, the date, and the donation amount written on the receipt.

Ergo, ask the Salvation Army guy for a receipt. — BEN POPKEN

My Six Biggest Tax Deductions for 2006: Charitable Donations [Blueprint For Financial Prosperity]


Edit Your Comment

  1. Magister says:

    This isn’t a bad thing. Anyone could ‘claim’ the duduction without even having to provide proof. At least now, when you fabricate the reciept you can be guilty of using a forged instrument!!! Weee…

  2. I ‘guess-timated’ my donations last year, and still got the deduction. Sigh.

  3. major disaster says:

    Honestly, I had no idea that receipts weren’t required before.

  4. brilliantmistake says:

    I get receipts for donations, but they sometimes only specify what I donated, not its value. Right now I’m looking at a letter from my local library acknowledging my donation of 24 books. They give the library’s tax #, but don’t put any monetary value on the books themselves. On my taxes, I put down a reasonable amount per book (usually working from turbotax’s estimates).

    So in the future, do I have to ask they estimate a monetary value and included it in all the letters/receipts? What a pain.

  5. josh1701 says:

    So in the future, do I have to ask they estimate a monetary value and included it in all the letters/receipts?

    According to the IRS, determining the fair market value of a noncash contribution is the responsibility of the donor not the charitable organization. If morecoffee’s deduction for the books was audited and the library provided him with the value in question, and the IRS didn’t agree with the value, the library would then be held responsible. This is why charitable organizations won’t provide values on donated property.

    For more information on charitable contributions, including the records you need to keep, visit IRS Publication 526.

  6. OtherMichael says:

    Don’t Panic!

    Since you’ll be reducing how much Uncle Sam gets, they might come ask you about it. For cash donations, if it’s under $250, just keep a receipt of the donation or some other personal record of it. The rules for under $250 are pretty lax since for $20 donation to your church you probably don’t get a receipt. If you donate more than $250, you need to get an acknowledgement from the receiving organization that must meet these criteria: date, donation amount, what you received in return, description and good faith estimate of the value of the donation.