Page 170 - Washington Nonprofit Handbook 2018 Edition

taxpayer’s return for the year is filed or, if earlier, the filing due date, taking
extensions into account. See Code section 170(f)(8)(C).

For a taxpayer performing gratuitous services for charity, unreimbursed
expenses incident to these services are considered adequately substantiated if the
taxpayer’s records adequately substantiate the amount of the expenses and the
charity provides a written statement:

• Describing the taxpayer’s services;

• Stating whether the organization provided any goods or services in
consideration for the unreimbursed expenses and, if so, providing a
good faith estimate of the value of the goods or services; and

• Stating whether the organization provided any intangible religious
benefits for the taxpayer. See Treas. Reg. section 1.170A-13(f)(10).

If payments to charity are made by withholding from the taxpayer’s salary or
wages, the amount withheld from each payment of wages is a separate
contribution for purposes of the $250 threshold. See Treas. Reg. section 1.170A-
13(f)(11). If the amount withheld for any pay period is $250 or more, the gift is
adequately substantiated by a pay stub or Form W-2 from the employer stating the
amount withheld and the recipient of the withheld amount, and a pledge card or
other document prepared by or at the direction of the donee organization stating
that the organization provides no goods or services in consideration for
contributions made by payroll deduction.

A contribution by a partnership or S corporation is treated as made by the
entity, not its partners or shareholders, who are allowed the deduction for the gift.
See Treas. Reg. section 1.170A-13(f)(15). The entity must therefore obtain
contemporaneous acknowledgment for a gift of $250 or more, even if no partner’s
or shareholder’s share of the gift is as much as $250, and a partner or shareholder
whose share of the gift is $250 or more is not required to substantiate the gift
further.

The contemporaneous acknowledgment requirement is waived if the donee
organization files a return including the information required to be given by the
acknowledgment. See Code section 170(f)(8)(D). Also, the Treasury, by regulations,
may waive some or all of the requirements of the acknowledgment rule in
appropriate cases. See Code section 170(f)(8)(E).

WASHINGTON NONPROFIT HANDBOOK -159- 2018