Don’t Forget Your Gift Receipt!

A recent US Tax Court case reminds us that individuals hoping for a US income tax deduction for gifts to charity must obtain contemporaneous written substantiation – often called a gift receipt – from the recipient charity. The deduction may be denied without a receipt even if the charity is a private foundation and even if the individual donor is a director or trustee of the charity. To be valid, the written gift receipt also must state whether the donee charity provided any goods or services to the donor in consideration for the gift and their value. While this has long been the rule for charitable contributions of $250 or more, the US Tax Court recently agreed with the Internal Revenue Service that a donor's charitable deductions should be denied because the donor did not obtain a gift receipt, even though there was no question the gifts were made (Jolene M. Villareale v. Commissioner, T.C. Memo. 2013-75).