On the Record: No Substantiation Without Representation
It is always the donor’s duty to substantiate charitable donations. But, considering the potential loss of a deduction for failure to comply with the rules, charities may be well advised to ensure a charitable deduction — and a happy donor — by providing the necessary acknowledgement for every donation, regardless of the amount.
Thank-you notes are always appropriate. Knowing what a donor will need to substantiate a gift for deduction purposes is an excellent way to maintain good relations with donors.
Kathleen Stephenson is of counsel with the Philadelphia office of Pepper Hamilton llp. Lisa B. Petkun is a partner in the Tax Department of Pepper Hamilton. “On the Record” keeps readers up to date on the latest tax and planning issues pertaining to fundraising endeavors and charitable organizations.