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The Michael Paul Wein Charitable Foundation

"Underpromise and Overdeliver"

IRS regulations
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Be sure that a contribution to your organization really is tax deductible to a person who files a USA tax return!

For any organization that claims to be tax-deductible for USA citizens on USA tax returns, that organization must follow these rules established by the USA IRS.

Information extracted from IRS Publ. 17 – Your Income Tax (general booklet):

Contributions

Reminder – you (the contributor) can deduct contributions . . .to a qualified organization (defined below under “Organizations that Qualify to receive Deductible Contributions”)  

ORGANIZATIONS THAT QUALIFY TO RECEIVE DEDUCTIBLE CONTRIBUTIONS.

You can deduct your contributions only if you make them to a qualified organization.  To become a qualified organization, the organization must apply for that status to the IRS.  Organizations must have received a letter from IRS which confirms the issuance of such status and which any contributor may ask to see to confirm this qualified status.

Additionally, Publ. 17, goes on to say:   

Written acknowledgment required. You can claim a deduction for a contribution of $250 or more only if you have a written acknowledgment of your contribution from the qualified organization....

Payment partly for goods or services. A qualified organization must give you a written statement if you make a payment that is more than $75 and is partly a contribution and partly for goods or services. The statement must tell you that you can deduct only the amount of your payment that is more than the value of the goods or services that you received.  It  must also give you a good faith estimate of the value of those goods or services.

Additionally, Publ 17, goes on to say the following funds paid to any qualified organization are NOT DEDUCTIBLE as charitable contributions::   

Monies paid for any raffle, bingo, or lottery tickets, no matter what charitable organization might benefit from your purchase of such a ticket.
Contributions to civic leagues, social or sports clubs, or chambers of commerce.
Payments to any group that is run for someone’s (or more than someone’s) personal profit.
The value of your time or services
The value of your blood given to a blood bank.

Information extracted from IRS's more comprehensive booklet Publ. 526   Charitable Deductions:

INTRODUCTION:

A charitable contribution is a gift to, or for the use of, a qualified organization.   It is voluntary and is made without getting, or expecting to get, anything of equal value.  Qualified organizations. Qualified organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals. You will find descriptions of these organizations under Organizations That Qualify To Receive Deductible Contributions above   You should also remember that such organizations have applied for qualified status to IRS and have received a letter which you may ask to see that confirms this qualified status.  

Mexican charities. You may be able to deduct  contributions to certain Mexican charities under an income tax treaty with Mexico.  The Mexican organization must meet tests that are essentially the same as the tests that qualify USA organizations to receive deductible contributions.  If the organization can not supply you with its qualifications and status, you can write to IRS, International Returns Section, POBox 920, Bensalem, PA 19020–8518.  

To deduct your contribution to a Mexican charity, you must have income from sources in Mexico.  

Charitable Benefit Events.  If you pay a qualified organization more than fair market value for the right to attend any charitable ball, banquet, show, sporting event, or any other benefit event, you can deduct only the amount that is more than the value of the privileges or benefits you receive.

Information extracted from IRS's Publ. 557 – Tax Exempt Organizations (which ALSO discusses Form 1023 and its requirements for tax-exempt status)    Information Provided to Donors

A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgement from the charitable organization.  In certain circumstances, an organization may be able to meet both of these requirements.  

Penalties. The penalty for failure to allow public inspection of annual returns is $20 for each day the failure continues. The maximum penalty  on all persons for failures involving any one return is $10,000

Information extracted from IRS's Publ. 1828 – churches, etc.

..All USA tax-exempt organizations must have an EIN (employer ID #) even if they have no employees

..In order to be eligible to state that contributions to it are USA tax-deductible, each organization must apply to IRS using Form 1023.  This form 1023 plus the IRS subsequent notification (known as the IRS determination letter) of approved status must be made available, upon request, to anyone who makes such a request.  Failure to provide such information makes the organization subject to a IRS fine.

..All such organizations must maintain normal records, including normal written minutes and other legal documents as well as normal bookkeeping records and resultant reports.  

Charitable Contributions—

Substantiation and Disclosure Rules

There are two general rules that a church or religious organization needs to be aware of to meet substantiation and disclosure requirements for federal income tax return reporting purposes.

A donor is responsible for obtaining a written acknowledgment from a charity for any single contribution of $250 or more before the donor can claim a charitable contribution on his or her federal income tax return.

A charitable organization is required to provide a written disclosure to a donor who receives goods or services in exchange for a single payment in excess of $75.  

Substantiation Rules

A donor cannot claim a tax deduction for any single contribution of $250 or more unless the donor obtains a contemporaneous, written acknowledgment of the contribution from the recipient church or religious organization. A church or religious organization that does not acknowledge a contribution incurs no penalty; but without a written acknowledgment, the donor cannot claim a tax deduction. Although it is a donor’s responsibility to obtain a written acknowledgment, a church or religious organization can assist the donor by providing a timely, written statement containing the following information:

name of the church or religious organization,

date of the contribution,

amount of any cash contribution, and

description (but not the value) of non-cash contributions. In addition, the timely, written statement must contain one of the following:

statement that no goods or services were provided by the church or religious organization in return for the contribution,

statement that goods or services that a church or religious organization provided in return for the contribution consisted entirely of intangible religious benefits, or

description and good faith estimate of the value of goods or services other than intangible religious benefits that the church or religious organization provided in return for the contribution. The church or religious organization may either provide separate acknowledgments for each single contribution of $250 or more or one acknowledgment to substantiate several single  ontributions of $250 or more. Separate contributions are not aggregated for purposes of measuring the $250 threshold.  

Disclosure Rules that Apply to Quid Pro Quo Contributions 

A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. A donor may only take a contribution deduction to the extent that his or her contribution exceeds the fair market value of the goods and services the donor receives in return for the contribution. Therefore, donors need to know the value of the goods or services. A church or religious organization must provide a written statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization.

 

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