When clients make charitable gifts expecting a tax deduction, they must be prepared to substantiate that gift if there’s a challenge by the Internal Revenue Service. Unfortunately, clients (and their advisors) often make mistakes regarding substantiation, resulting in the denial of the charitable deduction. A few of the articles in this month’s Charitable Giving Special Report underscore just how strict the IRS can be when enforcing this requirement and how a seemingly minor mistake can have costly consequences.
In “Noncompliance Isn’t an Option,” p. 36, Christopher P. Woehrle points out the need to get a contemporaneous written acknowledgment (CWA) of a gift from the charity. He goes on to detail the specified requirements that the CWA must meet. And in “Crucial Timing of Charitable Contributions,” p. 26, Conrad Teitell, Heather J. Rhoades and Brianna L. Marquis discuss the CWA requirement in the context of the recent Keefer v. United States court decision. Finally, Jonathan G. Tidd gives an overview in “The Dos and Don’ts of Charitable Gift Planning,” p. 10, of the various things that can go wrong when your client makes a charitable gift, including the failure to meet the substantiation requirements.
Some donors may be less concerned with getting a charitable deduction and more concerned with donating to causes they care deeply about. But with our country divided on certain key issues, donors may want to remain anonymous when giving to certain charitable organizations. Sara Barba and Elizabeth McGuigan tackle this issue head on in “Donor Privacy in the Wake of Dobbs,” p. 16. They assert that it’s more important than ever that our government protects charitable donors from threats and harassment as they give to causes that are important to them.
