I understand that receipts for cash contibutions to qualified charities will be required for tax year 2007?

Question

I'm thinking about those contributions made on a weekly basis, for example, to churches which do not typically provide receipts. I do not get a receipt for the $10 a week contributed to another qualified charity since, historically, one has not been needed. Any thoughts on this???

Answer 1

I understand that if you are audited, you will have to provide proof of those small donations. (receipt, canceled check, etc) As a practical matter, if you drop $5 in the church basket every week, you will not have a receipt. Deducting that amount will not make significant difference in your taxes but by the same token why should you not get the deduction. I would take the deduction and worry about the consequences of not having the receipt if you get audited. I can't see them putting you in jail for that. This is overzealous IRS nonsense.

Answer 2

The purpose of this new rule makes sense. Lots of people cheat by claiming donations that they don't really make. I'd guess you've seen questions here saying something like "how much in donation can I deduct without proof" and you know they're really saying "what can I get away with?"

That said, most of us toss a few bucks into Salvation Army Kettles around Christmas, and donations like that. And I guess we'd lose that deduction, if we stay strictly legal and report just what we have receipts for. But if you're giving regular donations, or larger sums, get a receipt. Your cancelled check would not necessarily be accepted, since there's no proof what it was for. (for example, a check written to a library could be for a lost book or fine - not deductible - or for a donation - deductible).

Most churches have some setup, usually envelopes that identify the giver, that are totalled up for the year, and a statement of total contributions provided.

As for the "other qualified charity" that you mention, even though a receipt hasn't historically been given because none was needed - the rules have changed, so if they are a legitimate charity, they'll be issuing them from now on.

Answer 3

Every church I have ever attended has issued a 'giving statement' each year. This amounts to a single annual receipt for all gifts given during the year. Of course, cash in the collection plate can't be recorded if they don't know who gave. Most churches will supply numbered envelopes for regular givers to use for record-keeping purposes. I don't know if the other charity can do something similar.

Edit: I understand canceled checks are no longer accepted in place of receipts. How does the IRS know you weren't buying a tape of the sermon? That would not be deductible.

Answer 4

You should talk to your chuch treasurer. Many chuches do provide a way to document your donations. For instance if you donate by paying a check a treasurer will know it is from you and can provide you with a receipt. My church has been doing this for many years.

Be careful. You should have receipts before claiming something. The government is a very nasty hungry beast.

Answer 5

I guess too many people are making up stuff and cheating on their taxes (even in the name of their churches).

Easiest thing for donors is use personal check for donations. Then you have either your bank statements or canceled checks as receipts. You can also save time on bookkeeping for everyone, by making larger but less frequent (i.e. monthly) donations rather than smaller weekly contributions.

Best wishes.

Answer 6

you won't be able to concern a valid receipt for tax applications, because you're actually not a charity. the only concern you're able to do is, once you circulate to the charity, assemble separate receipts for the separate quantities of money you provide them, and supply those receipts on your friends. next time, in simple terms have your friends write exams. it particularly is way much less stressful.

Answer 7

My guess is that churches will start turning up the heat on tithing now that you will need a receipt. Talk about a sick way to support that; thanks Rep Party!

If you're a regular church-goer, I would think that your pastor wouldn't have a problem with giving you a letter to present to the IRS if it was needed. (And if you're not but claim a deduction for contributions, expect to be held up for ransom by the pastor.)