MinistryCPA Special Topic: Year-End Giving Statement Wording

Have you looked at your ministry’s contribution report recently? Does it include the required IRS statement, “No goods or services were provided in exchange for your contribution”?

IRS code Sec. 170(f)(8) provides that, to be deductible, a money contribution of $250 or more must be substantiated by a contemporaneous written acknowledgment by the donee organization that indicates the amount and whether the organization provided any goods or services in consideration for the contribution and, if so, a good-faith estimate of their value.

In 2012, a couple’s charitable contribution of more than $22,000 was disallowed due to the omission of the statement, “No goods or services were provided in exchange for your contribution.” Although canceled checks and the church contribution report were produced during audit, the lack of the key phrase resulted in disallowance of the deduction and a higher tax bill for the couple.

If your ministry has already distributed incorrect contribution statements, new statements should be made available as soon as possible. Corrected contribution statements will meet the requirements if they are produced before the earlier of the tax return due date or the date the taxpayer files his return.