$250 charitable deduction pre-2007

[LCP]

In reference to the new rules for 2007, I've heard a number of sources state that you used to be able to deduct up to $250 without any support.

I' did not know that?

I may end up amending some returns this summer to claim that writeoff.... anybody else?

[Peachie]

Every item on your return

In reference to the new rules for 2007, I've heard a number of sources state that you used to be able to deduct up to $250 without any support.

I' did not know that?

I may end up amending some returns this summer to claim that writeoff.... anybody else?

should have a corresponding document. What you quote has never been the rule, or true, which is why we probably have the new rules now about contributions.

Peachie

[JohnH]

My mechanic says you're OK adding 20% to all your documented crontributions, but my hairstylist says it's actually 25%. I don't know which one to believe since both seem to have a pretty good handle on everything else about taxes.

[Jesse]

My mechanic says you're OK adding 20% to all your documented crontributions, but my hairstylist says it's actually 25%. I don't know which one to believe since both seem to have a pretty good handle on everything else about taxes.

The local bartender said it's 30% and he knows for a fact 'cause he's done it!

In reference to the new rules for 2007, I've heard a number of sources state that you used to be able to deduct up to $250 without any support.

I' did not know that?

I may end up amending some returns this summer to claim that writeoff.... anybody else?

I think what people have always got it mixed up w/ was the cancelled check sufficing for a receipt if it was under $250? Something like that, but there was never a certain undocumented amount that you could deduct.

[erchess]

Here is my way of explaining it to Clients

We CAN Deduct (that is we are able to) anything we wish. However the IRS CAN ask you for documentation and me for explanation of my basis in the law for the deduction. If we can't document and explain you will have to pay back the tax benefits with interest and penalty and there could even be penalty for me unless I reported on the return your lack of documentation and/or my lack of explanation. .

We MAY Deduct (that is we have permission to) only things for which you have adequate records and which have adequate basis in the law. What you are really paying me for is the knowledge that lets me find your lowest legal tax liability so that you pay no more than you legally owe and still have minimal risk of having to pay more later.. .

[LCP]

FWIW the "sources" I was referring to were on TV and in print.... not total yahoos.

I know that doesn't make it correct...............

[joanmcq]

Prior to 2007, documentation could be in the form of a notation such as 'gave $20 in church basket on jan 20, 2006.' I had cash donations stand up in audit where the client (an orthodox rabbi) described how he came up with the figure of $850 in cash donations; he described how many times per day he usually went to services, how much he gave in average, plus what his wife and kids gave on average and how many services per week they attended, and more on holy days, etc. For 2007 and after, this wouldn't fly; he would have to have a cancelled check, credit card reciept or receipt from the synagogue.

[Bees Knees]

In reference to the new rules for 2007, I've heard a number of sources state that you used to be able to deduct up to $250 without any support.

I' did not know that?

I may end up amending some returns this summer to claim that writeoff.... anybody else?

The correct answer is you use to be able to deduct up to $250 of donations you actually paid without any substantiation.

There is a difference between deducting an expense you actually paid without any written evidence, and deducting a bogus deduction merely because you can lie and get away with it. Prior to the new rule, oral testimony on cash charitable donations were allowed at audit to substantiate the actual amount paid.

Oral testimony is still allowed on a number of other deductions. TTB, page 8-1 in reference to travel expenses says:

• An expense (other than lodging) less than $75 does not need a receipt or
similar evidence to support a deduction. [Reg. §1.274-5(c)(2)(iii)]
• Oral statements containing specific information in detail may be used to
substantiate a deduction. [Reg. §1.274-5A(c)(3)(i)]

That does not mean you can deduct bogus expenses. It merely means you do not need a cancelled check or receipt to substantiate a legitimate travel expense that is less than $75, and some business deductions over $75 may be substantiated through oral statements made by the taxpayer concerning legitimate expenses actually paid.