Improper charitable receipt

[Kram BergGold]

Client has a receipt showing $2,000 of household items given away to Amvets. The receipt does not say no goods or services were provided in exchange for the contribution. I have advised client to get a letter from Amvets with the no goods or services clause. If she can't get the letter is it ok for me to prepare the return with the deduction?. Obviously I would explain to the client that if audited, the deduction will most likely be disallowed.

[AJsTax]

Not cash

Non cash donations are different as far as I know. no requirement for that disclosure,,only a receipt with the items and amount.

[MAMalody]

Unfortunately, the cash substantian rules for $250 or more at a single time do apply to this noncash contribution. You will want your client to have proper documentation to claim this item.

[Jiggers]

And be sure that there is a complete detailed listing of all the goods donated and the FMV of each one.

A total $2,000 won't work.

[FEDUKE404]

My 2¢ worth observation

Although I'm not sure on the receipt verbiage ("no goods or services....") for a non-cash contribution, I do know if this client thinks a $2k contribution to Amvets will fly with nothing more that a simple white piece of paper receipt (s)he is stomping onto dangerously thin ice.

Filling out Form 8283 might well present a challenge.

FE

[Kram BergGold]

Back to the question

Can we prepare a return with a charitable deduction of over $250 for which we know the client has proof that it was made but the proof is defective as in not the proper verbiage about goods and services. I know the proof will crumble in an audit. I just want to make sure of what my responsibilities are at this time.

[taxea]

Can we prepare a return with a charitable deduction of over $250 for which we know the client has proof that it was made but the proof is defective as in not the proper verbiage about goods and services. I know the proof will crumble in an audit. I just want to make sure of what my responsibilities are at this time.

Yes you can as long as you are sure the client understands the requirements and has acknowledged that they are met. You are not required to "audit" her records.

[Roland Slugg]

Since there are conflicting opinions above about this, I would like to offer a cite. Code §170(f)(8) makes it clear that the substantiation rules, including the "no goods or services ..." sentence, DO apply to donations of property as well as donations of cash.

[mactoolsix]

Can we prepare a return with a charitable deduction of over $250 for which we know the client has proof that it was made but the proof is defective as in not the proper verbiage about goods and services. I know the proof will crumble in an audit. I just want to make sure of what my responsibilities are at this time.

Yes you can as long as you are sure the client understands the requirements and has acknowledged that they are met. You are not required to "audit" her records.

Proper due diligence would require you look at the receipt. A receipt with the "magic" words does not qualify. We do not enter a receipt for $250 or more, on the return unless it has the proper words. I think you are treading on very thin ice.

Mike

[S T]

I just happen to be looking at a "Goodwill Receipt" and it does have the verbage - " Goodwill acknowledges that no goods or services were provided to donor in exchange for, or as a result of, this donation"

Had not thought about it too much on "donated items" so will be looking for on the AmVets, and other Receipts, etc in the future.

Thanks for bringing this to our attention.

Sandy

[joanmcq]

When presented with an imperfect receipt for cash, I've put the taxpayer on extension until the charity can perfect it. The taxpayer has to have the receipt by the filing date of the tax return, so there is time to correct them.

I've honestly never looked closely at the noncash receipts! But I do make the clients list items and provide the values.

[taxea]

Proper due diligence would require you look at the receipt. A receipt with the "magic" words does not qualify. We do not enter a receipt for $250 or more, on the return unless it has the proper words. I think you are treading on very thin ice.

Mike

And what do you do when the client gives you a stack of receipts that have no amount on them. I'm not sticking my neck out to fill them in for the client. This is sop with donars. I send them back and tell the client they need to get the value from whomever they donated to.

I provide a worksheet, for both cash and non-cash. The fill it out in their handwriting. I have not seen anything in the code that requires us to look at or ask for the receipts.

Sandy Goodwill probably uses the same receipt for both cash and non-cash. The statement is on there to cover those that need it.