Is the "contemporaneous" receipt still around?

[Corduroy Frog]

Haven't heard any grumbles in awhile about the need for a "contemporaneous" receipt needed to support charitable contributions.  Supposedly a taxpayer under audit could not go back to his church/charity and ask for a receipt at the time of the audit.  Instead he had to produce a receipt given to him at the time of the gift.  A so-called "contemporaneous" receipt which had to be issued on the spot instead of retroactively.

Depending on your point of view, this was justified so a taxpayer could not defraud the govt of tax money by getting a buddy at church to issue a phony document after the fact. 

My thoughts are that it is a government overreach and a just-as-phony document could be issued contemporaneously as not.

Is this audit mindset still around??

[BrewOne]

"Contemporaneous" was taught to me as meaning: by the time the taxpayer files their return.  So you are supposed to have it in hand when you file.

[jklcpa]

IRC sec 170(f)(8)(C):  scroll down linked page to 8C where it says:

Quote

(8) Substantiation requirement for certain contributions.

(C) Contemporaneous. For purposes of subparagraph (A), an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on or before the earlier of—

    (i) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or

    (ii) the due date (including extensions) for filing such return.

 

[Corduroy Frog]

Not at the time of the gift, but by the time the return is filed.

Thanks folks for the correction.

 

[Sara EA]

I don't think this is government overreach, just one of many attempts to stem abuse of the charitable donation deduction.  Remember before charities had to provide 1098C for car donations?  People would take the blue book value for donating an old car that had been sitting rotting in a field for ten years.  I recall that in the year the form was required deductions for cars dropped something like 80%.  Conservation easements are another area of rampant abuse that is in focus.  And we all have a lot of clients who say "same as last year" or pick a number off the ceiling when we ask about their donations.  We don't get those answers so often now that we remind them they have to have receipts.

[Corduroy Frog]

1 hour ago, Sara EA said:

And we all have a lot of clients who say "same as last year" 

How many such avoidance answers do you encounter?

1. "Same as Last Year"
2. "Deduct as much as you think I can get away with"
3. "Little Johnny stayed exactly 50% with me and 50% with my ex-wife"
4. "Don't claim any more revenue than the 1099s I received."
5. "I paid Hernando Valaquez exactly $599 for the work he did."

Government overreach?  Some of my customers are as honest as the day is long.  Others are questionable and give answers such as the above. (if they do this, I never let them off the hook) Others are basically good but take the position that "I am as honest with the government as the government is with us." i.e. not honest at all.

[Lion EA]

My response is then, "That makes your deduction $0." Except for 4. and 5., when I ask for their detailed P&L. I need clients less than they need me, so disengagement comes sooner the older I get.

[Catherine]

Lots of groups issue letters annually, if they have people who donate multiple times during the year. So the organization's end of year donation statement works. 

Several million "children" disappeared the year they started requiring SSNs for kids as dependents. 

[BrewOne]

I had a client who, after being told they owed a significant amount, said he'd given $12,000 to his place of worship.  I said I needed to see the receipts--he was half-right, he had $6,000 in monthly contributions and a year-end statement for $6,000.