IRS Follows Donation Law to the Letter

June 11, 2011  |  

(Wall Steeet Journal) — Get the letter. Get the letter. Get the letter. That should be the mantra of taxpayers who make charitable gifts of $250 or more.  “The letter” refers to the charity’s missive acknowledging your donation, and it must say certain things by a certain date for the gift to be deductible.  There isn’t any room for error here, as an Internal Revenue Service chief counsel memorandum from May demonstrates. In that case a donor who didn’t have a valid letter went to extreme lengths to correct the problem and still was denied.  “If you don’t have the correct paperwork, there’s no way to fix the problem,” says Laura Peebles, a director at Deloitte Tax in Washington. She once saw a six-figure deduction for a gift to a university denied because of no valid letter.  In Jan Van Dusen’s case, the judge denied some of her larger foster-cat-care deductions because she didn’t have a proper letter from the charity she was doing volunteer work for.

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