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Important: Information that churches & non-profit organizations need to know

Good morning,

Many of our clients & friends perform work within the community through churches and other non-profit organizations.

The following is imperative information from an actual tax case regarding charitable deductions that affects all churches and non-profit organizations and any taxpayers that claim charitable contribution deductions:

Taxpayers claimed a charitable contribution deduction primarily made up of checks written to their church for amounts larger than $250. The church acknowledged its receipt of the contributions on a year-end statement to the taxpayers, but there was no language concerning whether any goods or services were provided in consideration for the contributions, as required under IRC Sec. 170 (f) (8). The Tax Court disallowed the deduction and reminded taxpayers that the terms of the statute require an affirmative statement that no goods or services were received. David Durden, TC Memo 2012-140 (Tax Ct.)

It is crucial that the receipt of the contribution include the qualifying statement. This statement cannot be obtained after the fact.

If you are affiliated with a church and other non-profit organization, please make sure they are aware of this important information and feel free to contact us with any questions.

Gregory D. Miller, CPA

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