Gonsiorek: Properly reporting charitable contributions
Being a self-proclaimed “Tax Geek” is a bit like being a 3-year-old: I don’t just follow the law, I have to ask, “Why?” That has certainly come in handy when digesting and understanding the myriad of regulations enforced by our friends at the IRS. And just to be clear, your beef should not be solely directed at the IRS. Congress makes up the laws, the IRS is the agency charged with implementation and enforcement.
So back to the “Why?” Often IRS rules seem silly or punitive or both. But not if you take Nancy’s Toddler Approach to Tax Law and ask, “Why?” For example, a few months ago, this newspaper published a Letter to the Editor that caught my eye. It was written by an esteemed colleague and fellow CPA. She had learned of a recent court case that disallowed a tax deduction for a charitable contribution because the donor did not have a “contemporaneous written acknowledgement,” or CWA. To most of us, that is called “a thank you letter.”
My colleague wanted to give our community a heads-up: For every contribution you make, you must have a written acknowledgement from that charitable organization. In fact, for contributions of $250 or more, your canceled check will not suffice – you must have a CWA in order to claim the deduction. At first glance, you may be perplexed by this requirement but when you understand its purpose, it makes perfect sense.
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