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Optional Reporting Regulations Withdrawn

02.09.2016

Please GIVE, change jar_smThe IRS has withdrawn proposed regulations on optional reporting by charitable organizations. The proposed regulations had generated significant controversy over the collection of personal identification information about donors by charitable organizations.

Acknowledgments

Generally, individuals must obtain a contemporaneous written acknowledgment from the charitable organization indicating the amount of the cash and a description of any property contributed for any contribution of $250 or more (including contributions of cash or property). The acknowledgment must describe whether the charitable organization provided any goods or services in exchange for the gift and, if so, must provide a description and a good faith estimate of the value of those goods or services.

Several years ago, Congress provided an exception to the contemporaneous written acknowledgment requirement. Generally, a contemporaneous written acknowledgment would not be required if the charitable organization files a return on a form and in accordance with rules as the IRS would issue. The IRS issued proposed regulations on the exception in 2015.

Concerns

Almost immediately after the proposed rules were released, concerns arose. Many charitable organizations expressed concerns about the information reporting requirements, particularly Social Security Numbers from donors. Legislation to block the proposed rules was introduced in Congress.

Rules withdrawn

The IRS reported it received a substantial number of comments on the proposed rules, many expressing concern about safeguarding Social Security numbers and donors’ privacy. The IRS decided to withdraw the proposed rules. Because the IRS has withdrawn the proposed regulations, the exception to the contemporaneous written acknowledgment requirement remains unavailable.

Jennifer M. Vacha, CPAIf you have any questions about the withdrawn regulations, please contact your tax advisor or Jen Vacha, Principal, Tax Services, at 636.754.0230 or jvacha@bswllc.com.

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