IRS Proposes Regulation Regarding Reporting of Charitable Donations

Date: October 1, 2015

The IRS recently issued a proposed regulation regarding the reporting of charitable donations.  Under the current law, taxpayers who donate $250 or more to a charitable organization must obtain a written receipt from the charitable organization in order to claim a charitable deduction, and the receipt must contain specified information.  The law further provides that donors will not be required to provide a receipt when a charitable organization files a report reporting all the information that is currently required to be included in the written receipt so long as the report is in the form required by the IRS.  Since the IRS has not developed such a form, the charitable organization is required to provide the donor with a receipt, but donors are responsible for providing the IRS with documentation regarding the charitable deduction being claimed.  This information is not required to be reported on 990s since 990s are public and donor identifying information would be included.

The proposed regulation states that the IRS will now develop a report that may, but is not required, to be filed by the charitable organization for the purpose of reporting charitable donations.  Under the proposal, the charitable organization would be required to provide the donor with a copy of the donor’s information the organization included in its report filed with the IRS.   So, charitable organizations electing to file the return would have more administrative obligations as the organizations would be required to file the charitable donation report while still providing information to the donor.  

The proposed regulation also states that the IRS is concerned about charitable organizations collecting and maintaining a donor’s personally identifiable information.  The IRS is seeking comments on the entire proposed regulation, but especially on whether it should issue guidance for the collecting and storing of such information.  The proposed regulation may be accessed at$File/REG-138344-13.pdf.