Substantiation Rules – Cash Contributions
Cash contributions include those paid by cash, check, electronic funds transfer, or credit card. (See special requirements for payroll cash contributions.) Taxpayers cannot deduct a cash contribution, regardless of the amount, unless they can document the contribution in one of the following ways:
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A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include:
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A canceled check,
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A bank or credit union statement, or
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A credit card statement.
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A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution.
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Payroll deduction records described below.
Blank Pledge Card
Because a blank pledge card provided by the donee organization to a donor does not show the information required under Code Sec. 170(f)(17) (name of the organization, the date of the contribution, and the amount of the contribution), it is not sufficient substantiation for a cash, check, or other monetary gift.
Payroll Contributions
The guidance provided by the IRS (IR-2006-186; Notice 2006-110) for charitable contributions made by payroll deductions became obsolete June 30, 2018, when regulations incorporating the recordkeeping requirements of Code Sec. 170(f)(17) that were issued in 2008 became final. For contributions by payroll deduction, a taxpayer must keep:
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A pay stub, Form W-2, or other document furnished by the employer that shows the date and amount of the contribution, and
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A pledge card or other document prepared by or for the qualified organization that shows the name of the organization. If the employer withheld $250 or more from a single paycheck, the pledge card or other document must state that the organization does not provide goods or services in return for any contribution made to it by payroll deduction. (Existing Reg. Sec. 1.170A-13(f)(11)(i)) (Note: This language is not included in Reg. 1.170A-15(d)(1), which simply says that the pledge card or other document prepared by or at the direction of the donee must show the name of the donee.), A single pledge card may be kept for all contributions made by payroll deduction regardless of amount as long as it contains all the required information. (Reg. Sec. 1.170A-13(f)(11)(ii))
If the pay stub, Form W-2, pledge card, or other document does not show the date of the contribution, the taxpayer must also have another document that does show the date of the contribution. If the pay stub, Form W-2, pledge card, or other document does show the date of the contribution, the taxpayer need not have any other records except those described in (1) and (2).
Cash Contributions of $250 or More
To claim a deduction for a contribution of $250 or more, the taxpayer must have a written acknowledgment of the contribution from the qualified organization that includes the following details:
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The amount of cash contributed;
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Whether the qualified organization gave the taxpayer goods or services (other than certain token items and membership benefits) as a result of the contribution, and a description and good faith estimate of the value of any goods or services that were provided (other than intangible religious benefits); and
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A statement that the only benefit received was an intangible religious benefit, if that was the case.
If the acknowledgment does not show the date of the contribution, then the taxpayer must have one of the bank records described above that does show the contribution date. If the acknowledgment includes the contribution date and meets the other tests, it is not necessary to also have other records.
The acknowledgment must be in the taxpayer’s hands before the earlier of the date the return for the year the contribution was made is filed, or the due date, including extensions, for filing the return.