New Gift Substantiation Rules Under Consideration
October 22, 2015
Weighing in on IRS "Voluntary" Gift Substantiation Proposal
The League is partnering with the National Council of Nonprofits to share the following important update, and coordinate a response: The Internal Revenue Service (IRS) 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, file an alternative new information return to the IRS by February 28 every year, and give a copy of the record of a donation by that date to each contributor of $250 or more to substantiate the contribution. Among other things, the return submitted to the IRS would require the nonprofit to collect the donor's tax identification number, an action which would impose other legal requirements on nonprofits to retain and protect those numbers from identify theft.
- What might be the impact of collecting and reporting tax identification numbers for donors?
- How would the February 28 filing timeframe impact your orchestra's financial and development operations?