Cash into weekly collection plate no receipts?

[New York Enrolled Agent]

Where is "bank record" defined?

In the proposed regulations - I'll paste for you.

2) Bank record includes a statement from a financial institution, an electronic fund transfer receipt, a canceled check, a scanned image of both sides of a canceled check obtained from a bank website, or a credit card statement.

[MAMalody]

Contributions over $250 need receipt from church and statement to "no goods....". One statement I have seen has 2011 on the top, but contributions are written in as 1st sunday in April, second Sunday in April. No specific day. There thinking as they can copy the same statement every year and just change the date. Will this work?

I don't see why not. The receipt can show the entire year's deductions in total (one lump sum) and does not have to be broken down by specific date contributed.

Per Publication 1771: "A donor cannot claim a tax deduction for any contribution of cash, a check or other monetary gift unless the donor maintains a record of the contribution in the form of either a bank record (such as a cancelled check) or a written communication
from the charity (such as a receipt or letter) showing the name of the charity, the date of the contribution, and the amount of the contribution."

This would indicate that the documentation given by the church MUST have the specific date of each contribution on it. It would also seem to indicate that a receipt showing the total amount only would not be acceptable.

[AJsTax]

Does have a date

Per Publication 1771: "A donor cannot claim a tax deduction for any contribution of cash, a check or other monetary gift unless the donor maintains a record of the contribution in the form of either a bank record (such as a cancelled check) or a written communication
from the charity (such as a receipt or letter) showing the name of the charity, the date of the contribution, and the amount of the contribution."

This would indicate that the documentation given by the church MUST have the specific date of each contribution on it. It would also seem to indicate that a receipt showing the total amount only would not be acceptable.

The year end letter does have a date on it. says for the year 2011 ( or whatever). That is close enough for me to use.

[JohnH]

Just curious about something here.

If a church provided a complete statement to the donor showing date, amount, etc but forgot to put the "intangible religous benefit" boilerplate on the statement, would the taxpayer be at risk of losing the tax deduction if audited?

[FEDUKE404]

Paperwork incomplete

Just curious about something here.

If a church provided a complete statement to the donor showing date, amount, etc but forgot to put the "intangible religous benefit" boilerplate on the statement, would the taxpayer be at risk of losing the tax deduction if audited?

In theory, yes. In practice....well, let's hope some reason would enter.

But the newer twist to your question might be is the preparer at risk for listing a potentially "inappropriate" contribution? Maybe Koss can lead us through that minefield.

OTOH, several years ago I had a client whose parent died and was buried in the country church graveyard (I think that is correct, instead of "cemetery"?). The client had basically paid "the church" several thousand dollars for plot+services+ whatever, and that was listed as a "donation" on the church tax statement. I don't think the "IRS verbiage was there"...could be wrong on that part.

In any case, we just removed the funeral expenses and moved onward.

FE

[S T]

Church Receipt

I have another question,

Is the Church required to issue a receipt to the Donor for any amount? or is the Church only required to issue a receipt for $250 or more?

Example: A regular Donor that normally pays by check , Church receipts and adds that to their yearly giving - along with any cash in an envelope that is duly noted. All is on the Yearly Stmt.

A donor that does not always give on a regular basis and does not pay by check, but pays by cash - noted on the offering envelope - but the amount is under $ 250 -

Is the Church required to provide them with a receipt or annual record???

Shouldn't the Church - if they have the appropriate information, issue the receipts/annual records regardless of if the amount is under $ 250 or over $ 250?



Sandy

[taxea]

Contributions over $250 need receipt from church and statement to "no goods....". One statement I have seen has 2011 on the top, but contributions are written in as 1st sunday in April, second Sunday in April. No specific day. There thinking as they can copy the same statement every year and just change the date. Will this work?

The problem is...no longer can we use the each time to each different donee could add up to no donee getting a total of 250 per year...it is now a total of 250 over the course of the year and the IRS requires receipts/documentation of a box of GS cookies...so I don't think no receipt for a cash donation is going to fly any more

[Jiggers]

Help me understand this on contributions.

1. A cancelled check under $250 is sufficient as substantiation for a charitable donation to a non-profit organization.

2. A receipt for cash under $250 is sufficient as substantiation for a charitable donation to a non-profit organization. As is a credit card receipt.

3. If the a single donation is $250 or more, an individual receipt or letter is required, with the "...no goods or services..." statement.

4. An annual letter from the non-profit organization detailing the contributions made during the year, including the donations of $250 or more in one instance, is sufficient and it must have the "... no goods or services..." statement. The detail is the date and dollar amount.

The only problem I see is that many churches and other non-profits do not understand the reporting requirements and the need for the "...no goods or services..." statement. And many banks provide only one side of the cancelled check in the miniature imaged copies. How much due dilligence do we perform on these?

[JohnH]

I don't think the church is "required" to do any sort of reporting. Although failing to acknowledge contributions would be a really bad idea.

[Gary2]

I don't think the church is "required" to do any sort of reporting. Although failing to acknowledge contributions would be a really bad idea.

With the exception of a 1098-C for certain donations. Although I'm not sure if the rules that exempt churches and certain other organizations from the 990 requirements also apply to the 1098-C.

[Lion]

1994

According to handouts from a church treasurers' conference I attended in 1999, churches are subject to substantiation and disclosure requirements with respect to contributions after 31 December 1993. The substantiation must include a statement as to whether any goods or services were provided in return for the contribution. The handouts referred us to Pub. 1771 for a discussion of the "new" tax laws:

http://www.irs.gov/pub/irs-pdf/p1771.pdf

which apparently still exists and has been revised and updated.

[JohnH]

So that publication confirms that the exepmt organization is not required to provide any documentation, but it can choose to assist the donor by providing it. And if the exempt organization provides the documentation, it may as well be in the proper form if it's going to do anybody any good. Naturally, it's in the organization's best interests to do this, but the government cannot require any reporting of this type by exempt organizations.

It's also my understanding that all contributions of less than $250 (and for which only intangible religious benefits result) can be substantiated by the bank record alone, irrespective of whether the organization provides a statement of any kind . This would even apply to multiple contributions to the same exempt organization.

So, for example, you could write a $100 check to your church or synagogue each week and claim a $5,200 contribution deduction on your tax return at year end, provided the contributions are legitimate. And no matter whether you received a statement, or your checks and the statement disagreed, or whether you threw the statement away, your deductuon is still valid as long as you can produce copies of the checks.

[S T]

So my understanding would be,

Based on the Pub 1771 for Exempt Organizations, they then do not have a requirement to issue any statement, but then do so for donations of greater than $ 250 as a courtesy, along with the appropriate documentation of "no goods or services" statement

If a person donates in cash and that amount is under the $250, the person would or should then request a statement from the Exempt Organization for same - in order to use the deduction on their tax return. As that would be that persons only "proof of donation"

This would relate to Cash Donations, not what a party would or could substantiate with Canceled checks.

Sandy

[JohnH]

That's my understanding. I'm not advocating that exempt organizations not provide statements for valid gifts. I'm simply raising a question with respect to whether they are required to do so. Practical considerations require that they issue a receipt and/or comprehhensive statement for all donations (regardless of size) as a matter of good donor relations, a way to say "thank you", a way to assit the donor in obtaining the proper tax deduction, etc. (A smart donor will want to take the tax deduction if for no other reason than to free up additional money they can donate to the organization rather than to the government). But I do think it's important to draw a clear distinction between what the government can require an exempt organization to do vs what it simply is not allowed to require.

A second objective is to establish that a client who has proper documentation (bank records for example), and who consistently gives less than $250 per gift, can legally claim their deductions even if they have no statement of any kind from the exempt organization. And that this is true even if total gifts to a single organization exceed $250 in a year - I have had conversations with tax preparers in the past who took the opposite position and I believe they are wrong.

[S T]

As always JohnH thanks for your thoughts - I was targeting on the Cash Donations for under $250, as the New client (church) I acquired had asked.

The Church meets the standard of issuing the Annual Giving Statements for regular Giving and records appropriately, and they are also keeping any envelopes marked for Cash, etc for a period of 8 years.

They just are not issuing Statements to those parties with Cash Donations under $ 250

Sandy