Charitable Contributions: A Simple Omission Could Cost Your Donors Thousands of Dollars

Does your nonprofit receive individual donations in excess of $250? Congratulations!

Do you issue letters stipulating whether the donor was provided any goods or services in consideration, in whole, or in part, for any of the property donated?

If not, your donors are at risk of having their donations disallowed.


Section 170 of the Internal Revenue Code details the need for such substantiation. If no consideration was given, a statement as simple as:

“The taxpayer has not received any goods or services in consideration for his/her gift” 

suffices. Otherwise, the amount of consideration needs to be clearly stated. This document must be issued to taxpayers by the time they file their returns.


For questions relating to these and other issues regarding maintaining your organization’s tax-exempt status, contact us at: http://keepmetaxfree.com/contact-us/


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