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Contemporaneous Acknowledgement for Contributions


Cathy

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Aside from the other requirements for the Donee of contributions in excess of $250 (at one time), a problem I am having is getting a signature on the written acknowledgement.  I might be too picky, however, with a word processor being in everyone's possession these days, it would be too easy to duplicate the letterhead I am seeing from churches in our area.  It appears that no one wants to actually sign the written acknowledgment.  It's my theory that if a Treasurer gets paid to handle the church's finances, then that Treasurer needs to sign such a document in lieu of a pastor or priest signing it should neither of the two want to sign themselves.  If it was my church and said Treasurer refused to sign the acknowledgment, I think I would be looking for a new Treasurer.

I have gone over Publication 1771 and realize an email (which is o'kay in the pub.) from the donee (churches in these instances) cannot show a signature unless the church has special computer equipment and most do not.  However, as an email can actually be traced back to the sender,  then that can be proof the acknowledgment came from the church and not just fabricated.

I'm not saying original signatures must appear on the documents as plenty of the larger organizations uses a signature stamp such as St. Jude.

In Publication 1771 (Charitable Contributions), nowhere or anywhere else as far as I can see makes reference to signatures, however, the words "written acknowledgement" to me means a signature, plain and simple.  Am I being too picky or does anyone agree with me?

Thanks!

Cathy

 

 

 

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A recent experience of mine involved an only child of parents recently deceased.  With her inheritance, she wanted to payoff her church's mortgage of

approx $142,000, and do it anonymously.   No acknowledgement, but they kept their paper trail.   Well, guess what happens the two years later when she has a

huge income year, big tax liability:   She wants to go back and amend previous year and claim the donation to church.  Speakers at two different NATP events

suggested that I might have a Circular 230 issue if I amended the return for her.   So, I suggested she seek a specialist to perform the 1040X.  She recently contacted me

ahead of this year's appointment to say she's getting $22,000 in refunds.

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I never really thought about requiring a signature since there's no IRS requirement mentioning it.  I don't think the absence of a signature would invalidate a written acknowledgement as long as the document appears to be valid on its surface.  

On the other hand, over the past few years I've sent several letters to church financial secretaries over the years advising them that the "No goods or services" language was missing from their contribution summaries.  I send the letters anonymously, not because I'm afraid of their finding out the source, but simply because I want them to know my motivation is not to drum up business or engage them in any manner.  I also send them a summary of the court case regarding this matter.  I suggest that they check with their denomination or the ECFA about the subject of the letter. Many small and moderate size churches have volunteers doing this task.  My intention is to help them rather than discourage them from serving.  

 

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I'm Treasurer of my Church, and it is a large Church, but it is not a paid position.  I didn't realize that some Churches paid their lay leadership.  Interested to hear how this works in other congregations.  (No, I am absolutely NOT looking to get paid, regardless, just curious.)

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11 hours ago, kimjo said:

A recent experience of mine involved an only child of parents recently deceased.  With her inheritance, she wanted to payoff her church's mortgage of

approx $142,000, and do it anonymously.   No acknowledgement, but they kept their paper trail.   Well, guess what happens the two years later when she has a

huge income year, big tax liability:   She wants to go back and amend previous year and claim the donation to church.  Speakers at two different NATP events

suggested that I might have a Circular 230 issue if I amended the return for her.   So, I suggested she seek a specialist to perform the 1040X.  She recently contacted me

ahead of this year's appointment to say she's getting $22,000 in refunds.

The fact that the client got her a refund on her claim, doesn't mean that the 1040X won't be audited.  If that happens, then the refund would have to be repaid  - with penalties and interest.

 To be deductible, any contribution over $250 has to be acknowledged by an  CONTEMPORANEOUS written acknowledgement from the donee org. There are no exceptions and there have been a number of court cases that have upheld this.   I know of many cases where amended returns provided refunds, but were later audited with unpleasant results. It may not seem logical, and we all know the IRS doesn't do illogical things. :}  

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18 hours ago, kimjo said:

A recent experience of mine involved an only child of parents recently deceased.  With her inheritance, she wanted to payoff her church's mortgage of

approx $142,000, and do it anonymously.   No acknowledgement, but they kept their paper trail.   Well, guess what happens the two years later when she has a

huge income year, big tax liability:   She wants to go back and amend previous year and claim the donation to church.  Speakers at two different NATP events

suggested that I might have a Circular 230 issue if I amended the return for her.   So, I suggested she seek a specialist to perform the 1040X.  She recently contacted me

ahead of this year's appointment to say she's getting $22,000 in refunds.

Did your client amend both years?  The year of the original contribution removing it, and then the "new" year of the contribution.  I would have gotten  the acknowledgement for the $142k in the first year.  That is too big a number.  "Anonymous" can mean no public notice, but it can also mean that it stays within top leadership and the donor.  

I would have the client come in, and then fire them. 

Did that this year.  Client amended last years return.  Because turbo tax is good software and let him do it. 

Shove off, A-Hole.

Rich

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The large church donation produced a carryover to the next year.  The anonymity sought was from both leadership and the congregation. She

initially produced an acknowledgement letter, two years later, undated, not contemporaneous.   And I advised her it was unacceptable.  Thanks for sharing

 

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19 hours ago, jasdlm said:

I'm Treasurer of my Church, and it is a large Church, but it is not a paid position.  I didn't realize that some Churches paid their lay leadership.  Interested to hear how this works in other congregations.  (No, I am absolutely NOT looking to get paid, regardless, just curious.)

 

Why wouldn't they pay? Local churches pay ground keepers, ministers and musicians - why not the bookkeeper? 

I have several professional musician clients and they all get paid for performing at church services.

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Thanks, Roberts.  I understand now.  We are a large Church, so the bookkeeper/business administrator position is a staff position, and the Treasurer is a lay leadership position.  I sign checks, do the budget, approve payroll, and make adjusting entries and report the financials monthly, but I do not do the day to day bill paying, etc.

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Yeah, I haven't seen where a board member is paid and it sounds like you are at that level.

My sister in law worked as a youth minister - it was a 24x7 type job with kids calling and stopping by her house at all hours. People then acted like she should do it for free out of the goodness of her heart. Since she quit (her kids got old enough to no longer be involved) they've had a series of ministers quit and every year they ask her to come back as they find another replacement. It's probably like being a teacher - nobody gives them the respect they deserve for what they have to put up with.

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Rag-tag administrations in churches abound here in the rural south.

I'm not talking about the stoic multi-million dollar church buildings with 2500 members and at least 5 CPAs.  We have them too.  But if you don't live here, you don't see the hundreds of small church buildings with memberships less than 50.  Sometimes one person collects (and counts) the money on Sunday and deposits it on Monday without anyone else ever seeing it.  Others don't even give the pastor a W-2 - no one in the church even knows how.

If you prepare taxes down here, you will encounter some of these pastors/preachers.  Language such as "contemporaneous receipt" is not understood by someone who didn't learn to say "refrigerator" until yesterday.  Many of these are good people, just simply not knowledgeable.  I am quite liberal dealing with people for whom I believe honestly donate.  If the IRS catches these people, then so be it.  I am reluctant to enforce something I believe to be unfair from the outset.  The IRS doesn't require contemporaneous receipts for equipment, supplies, other expenditures upon audit - why is it suddenly fair that the courts uphold their insistence on "contemporaneous" receipts?

If I'm not mistaken, the first court case ruling against a donor was decided in favor of the IRS in 2013, so it may be rather recent legislation.

 

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