Don’t Forget: IRS requires written acknowledgement for contributions of more than $250

In 2006, theco-founder of NDM Ferret Rescue Sanctuary, Inc. made forty-four (44)contributions to her organization totaling $10,022.  Seventeen (17) of those contributions, totaling $7,629, were eachfor $250 or more. While the IRS was satisfied that the co-founder actually made thecontributions and that the organization was a valid charity, the IRS did notallow deductions for the seventeen (17) contributions over $249.99.

This is becausethe IRS requires a written acknowledgement from the donee for a charitable contributionof $250 or more. Moreover, the IRS imposes a timing requirement for theacknowledgement. The person wanting to claim the deduction must get theacknowledgement “on or before the earlier of” the dates he/she files the returnfor the year the contribution was made or the due date, including anyextension, for filing the return.

The obviousmoral of the story is that if you are a person who made a contribution of $250or more to a qualified organization and you want to claim a deduction, get anacknowledgement before you file your return.

Interesting,however, is the ease with which the acknowledgement condition can be met. Inthe case involving NDM Ferret Rescue, one option for the co-founder would havebeen to write herself a letter. She would have had to provide the letter to the IRS, however, only if the deduction was questioned in an audit. Does this make muchsense? What are the likely policy reasons for this requirement?

http://www.irs.gov/publications/p526/ar02.html#en_US_2012_publink1000229696

http://www.forbes.com/sites/peterjreilly/2013/03/23/charity-president-needed-to-write-herself-a-letter-to-claim-charitable-deduction/

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