Publication 1771: Charitable Contributions - Substantiation and Disclosure Requirements

Publication 1771, issued by the Internal Revenue Service (IRS), is a resource that explains the federal tax laws surrounding charitable contributions. It applies to both donors who make contributions and charitable organizations that receive them. The publication focuses on two key areas:

  • Substantiation: This refers to the documentation a donor needs to claim a charitable contribution on their tax return.
  • Disclosure Requirements: These are the rules charities must follow when they receive certain types of contributions.

Why is Publication 1771 Important?

Publication 1771 helps ensure that charitable contributions are properly documented and reported. This benefits both donors and charities:

A. Donors: By understanding the substantiation requirements, donors can ensure they have the necessary documentation to claim their charitable deductions on their tax returns.

B. Charities: By following the disclosure requirements, charities maintain transparency and avoid potential tax penalties.

Substantiation for Donors

Recordkeeping: Donors are required to maintain records for all their charitable contributions, regardless of the amount. These records should include:

  1. Name of the charitable organization
  2. Date of the contribution
  3. Amount of the contribution
  4. For cash contributions of $250 or more, a written acknowledgment from the charity (more details below)
  5. For non-cash contributions, a detailed description of the property donated and its estimated value

Written Acknowledgement: A written acknowledgment from the charity is crucial for claiming a deduction for cash contributions of $250 or more. This document should include:

  1. The amount of the cash contribution
  2. A statement indicating whether the charity provided any goods or services in exchange for the contribution (important for determining the deductible amount)
  3. The charity's name and EIN (Employer Identification Number)

What if I lose my written acknowledgement?

If you lose your written acknowledgement, you can try contacting the charity for a duplicate. You may also be able to substantiate your deduction with bank records showing the donation amount and date.

Do I need a written acknowledgement for contributions less than $250?

No, a written acknowledgement is not required for contributions under $250. However, it's still recommended to keep good records of all your charitable donations.

What about non-cash contributions?

For non-cash contributions valued at $250 or more, you'll generally need a qualified appraisal of the donated property. Also refer to Publication 561, "Determining the Value of Donated Property," for additional guidance on this topic.