From the National Council of Nonprofits:
The Internal Revenue Service has published proposed regulations regarding the “contemporaneous written acknowledgement” requirement for contributions of $250 or more.
Under current law, nonprofits must provide donors certain written documentation regarding receipt of donations, such as “the amount of cash and a description of any property other than cash contributed” and “whether any goods and services were provided by the donee organization in consideration for the contribution.”
The IRS is proposing that nonprofits, on a voluntary basis at this time, file an additional new information return with the Service by February 28 every year and give a copy of it by that date to each contributor of $250 or more to substantiate the contribution. Among other things, the return would require the nonprofit to collect the donor’s Social Security number, an action which would impose other legal requirements on nonprofits to retain and protect those Social Security numbers from identify theft.
A mandatory version had been considered and rejected in the past because the proposal raises numerous legal, policy, and confidentiality problems.
The proposal requests nonprofits file the following information to both the donor and to the IRS:
- (A) The name and address of the donee;
- (B) The name and address of the donor;
- (C) The taxpayer identification number of the donor;
- (D) The amount of cash and a description (but not necessarily the value) of any property other than cash contributed by the donor to the donee;
- (E) Whether any goods and services were provided by the donee organization in consideration, in whole or in part, for the contribution by the donor; and
- (F) A description and good faith estimate of the value of any goods and services provided by the donee organization or a statement that such goods and services consist solely of intangible religious benefits.
You can read the full proposal here.
The National Council of Nonprofits is evaluating the proposed regulations and is seeking input from nonprofits on how it would affect record-keeping, privacy, and other practices. You can also leave a comment with the IRS directly here or read posted comments here.