Pay stubs for payroll deduction to charity?

[OtisMozzetti]

The client is employed by a government-operated hospital. He made contributions by payroll deduction to its fund-raising drive for a new Critical Care Pavilion. He has provided a letter of acknowledgement on the non-profit Hospital Foundation's letterhead. That letter acknowledges how much he contributed and that he received nothing in return.

Someone at the IRS has said she requires his last "pay stub" but the client did not retain (or even print out?) any pay stubs. Instead, the hospital's human resources payroll department has provided him a signed letter stating what was deducted, along with a two page printout from their payroll system.

He is being audited on another issue, which I don't want to discuss, about his charitable contributions.

Is the letter of acknowledgement, plus the letter from the human resources payroll department, adequate substantiation? Or does he have to have "pay stubs"?

[travis bickle]

Why does the IRS want a pay stub?

The client is employed by a government-operated hospital. He made contributions by payroll deduction to its fund-raising drive for a new Critical Care Pavilion. He has provided a letter of acknowledgement on the non-profit Hospital Foundation's letterhead. That letter acknowledges how much he contributed and that he received nothing in return.

Someone at the IRS has said she requires his last "pay stub" but the client did not retain (or even print out?) any pay stubs. Instead, the hospital's human resources payroll department has provided him a signed letter stating what was deducted, along with a two page printout from their payroll system.

He is being audited on another issue, which I don't want to discuss, about his charitable contributions.

Is the letter of acknowledgement, plus the letter from the human resources payroll department, adequate substantiation? Or does he have to have "pay stubs"?

Since your client has provided the proper documentation from the recipient concerning his charitable donation(s), there is no reason for a final "pay stub" . Unless your IRS auditor can give a cite for this, I am not too sure if I would even comply -- what if the final pay stub shows the client donated $XXX, but in reality the client donated $XXX+YYY because of a cash donation he forgot to mention to you?

At any rate, if you do wish to provide this to the IRS, I am at a total loss as to why his HR department cannot reprint any number of pay stubs.

[OtisMozzetti]

Since your client has provided the proper documentation from the recipient concerning his charitable donation(s), there is no reason for a final "pay stub" . Unless your IRS auditor can give a cite for this, I am not too sure if I would even comply -- what if the final pay stub shows the client donated $XXX, but in reality the client donated $XXX+YYY because of a cash donation he forgot to mention to you?

At any rate, if you do wish to provide this to the IRS, I am at a total loss as to why his HR department cannot reprint any number of pay stubs.

I don't know yet how this particular employer provides payroll statements when it pays its employees. When he went to the HR Payroll Department for a copy of his last payroll statement of that prior year (2008), he was given a signed letter along with a 2-page printout from their data system. What I don't know is whether it is possible to get an exact copy of the paper that is made available to employees at the time they get paid, and whether or not that actual "pay stub" is a requirement to have a charitable deduction in case alternate reliable substantiation such as his is furnished.

Another small issue is that I don't know whether payroll statements made available to employees do or don't provide the cumulative Y-T-D amount of all applicable deduction items. If not, then I would need all pay stubs for the year instead of just the last pay stub.

[S T]

Maybe another option

What State?
If the employer can not provide payroll stubs with Year to date info, (They should be able to)
What about asking the Employer for their quarterly State Payroll Reports, which should show the gross wages and the State Withholding, by employee.
It is also my understanding, that as an employer, they are required to keep a minimum of 3 -4 years of payroll records to provide not only to the State Reporting Agency, but also to the Employee.

Seems, like States are "lazy" and one dept does NOT talk to another Dept. (as in Income tax versus Employee/Employer Taxes- payroll)

Oops - posted this to the wrong thread
Good Luck!

Sandy

[Kram BergGold]

Agree with Otis

The acknowledgement letter is all you need. Tell the examiner accept it or I want to speak with your supervisor.

[OtisMozzetti]

Publication #526

I looked in IRS Publication #526, charitable contributions, on page 18. The word "or" is used a lot of times in describing what is required.

[joanmcq]

for payroll deduction charitable contributions, the paystub(s) is required, along with the letter. depends on whether it was through payroll or something else.

[Snaggletooth]

Bodacious Auditor

It sounds like the amount is being substantiated by two separate third-party sources. In my opinion the auditor is too zealous to disallow this charitable deduction.

Why does their quest for substantiation go above and beyond finding the truth?

[OtisMozzetti]

the quest for substantiation

Why does their quest for substantiation go above and beyond finding the truth?

Someone who works with me told me that the IRS is now "paying examining officers a percentage of the revenue they generate". I told her that I do not believe that statement.

=======
In any event, this particular auditor recently accepted substantiation that consisted of the following:
1. letter of acknowledgement from the charitable foundation, stating the amount contributed and stating that no property or services had been exchanged for the contribution.
2. letter signed by the Human Resources/Payroll person stating that the employed taxpayer had contributed the amount in question via after-tax payroll deductions.

My parsing of the exact words found in IRS Publ. #526 convinces me that the documents I provided complied with what they the IRS had told us meets their requirements. I provided the auditor a copy of page 18 of that publication.

[joanmcq]

For charitable, the IRS is generally looking for both the letter and proof of payment by the donor, like a cancelled check(s) or credit card statement, especially if the amount is $250 or more.