Monday, June 10, 2013
Donors Lose Thousands to IRS for Inadequate Receipt - NPQ - Nonprofit Quarterly
Donors Lose Thousands to IRS for Inadequate Receipt - NPQ - Nonprofit Quarterly: Unfortunately, the church didn’t follow all components of the four-part test for gift receipts, as detailed in IRS Publication 1771. For each gift to a charity over $250, the charity must document in writing a bank record or written communication, which must be contemporaneous. (This means that you must receive the written acknowledgement before you file your federal income tax return for the year of the contribution or prior to the due date—including extensions—of the return.) The written acknowledgement must state the amount donated, and it must also state whether goods or services were provided by the charity in return. If so, it must state their value, and if the donor received “intangible religious benefits,” the written acknowledgement must state this as well.