For Tithing or Other Gifts to Church – Get Valid Receipt

Charitable Gift Planning

If you regularly give to your church, make sure you get an acknowledgment letter that complies with IRS regulations – otherwise you are not entitled to deduct the gifts. Furthermore, tax preparers should not include deductions for gifts unless the taxpayer can produce the proper receipts.

Here’s Professor Christopher Hoyt’s report a recent decision from the Tax Court on this issue:

By way of background, a gift over $250 is not deductible unless the
charity delivers a letter to the donor that states (a) the amount of the
donation plus (b) a statement that there were no goods or services
provided to the donor. (If there were any goods or services, then the
statement must describe the goods or services and set forth a good faith
estimate of the value of those goods or services.) Sec. 170(f)(8)(C);
Reg. Sec. 1.170A-13(f)(3)

Here the donors made tithes to their church but the church failed to
give the statement with the magic language. Despite the cancelled
checks and the Tax Court’s acknowledgment that the tithes were
charitable gifts, the charitable tax deduction was disallowed. The
church finally sent a letter with the magic statement that there were no
goods or services after the donors were audited, but since the letter
was received after the return was filed so it was not “contemporaneous”

The court case stresses the need for all charities to competently send
to their donors a contemporaneous written acknowledgment for all gifts
of $250 or more.

Daniel Gomez et ux. v. Commissioner, T.C. Summ. Op. 2008-93 (July 30,

During 2005 petitioners paid a total of $ 6,548.27 to the Apostolic
Assembly by 20 separate checks. … Ten of the checks, for a total of $
6,100, indicated that they were for tithes, and each check was over $
250. A letter from the Apostolic Assembly, dated January 22, 2008,
indicated that petitioners paid a total of $ 6,552 as tithes during

The letter from the Apostolic Assembly was not contemporaneous with
the claimed deduction. The letter was dated January 22, 2008, the date
of the Court’s trial session in El Paso, Texas, and was not received by
the earlier of petitioners’ filing their income tax return or the due
date of April 17, 2006. See sec. 170(f)(8)(C); sec. 1.170A-13(f)(3),
Income Tax Regs.

The letter from the Apostolic Assembly and the 10 canceled checks
indicating that they were for tithes are reliable. However, they do not
meet the substantiation requirements set forth by the Internal Revenue
Code or the Treasury regulations. According to the Internal Revenue Code
and the Treasury regulations, the required acknowledgment of the
charitable contribution not only must include the amount contributed,
but also must state whether the charity provided any goods or services
in consideration for the contributions and describe and set forth a good
faith estimate of the value of those goods or services. See sec.
170(f)(8)(B); Kendrix v. Commissioner, T.C. Memo. 2006-9; sec.
1.170A-13(f)(2), Income Tax Regs. Because petitioners failed to comply
with section 170(f)(8) and section 1.170A-13(f), Income Tax Regs., we
are constrained to hold that they are entitled to deduct as charitable
contributions only the $ 420.50 respondent conceded.

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