Year-End Giving: Accounting for Charitable Contributions

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Charitable contributions are an effective incentive for taxpayers that also benefit communities. However, taxpayers must diligently track their contributions and maintain proper substantiation in order to claim charitable contribution deductions on their tax return. Substantiation requirements for noncash contributions can extend beyond a simple “Thank You!” receipt from a donee organization.

In a recent Tax Court case, a couple was audited after claiming charitable deductions that equated to almost 45% of their adjusted gross income. The examination primarily focused on the lack of existing substantiation, not the amount contributed. The taxpayers filed Form 8283, which is required for noncash gifts greater …read more

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