Gift Receipts … Continued

Last time, I suggested this language for a year-end cash gift receipt:

Thank you for your cash gift of $5,000 made by your Chase Bank check number 2651, dated December 31, 2020, which [our charity] received in the mail on January 4, 2021.

[Our charity] provided no goods or services to you in consideration of this gift.

This language isn’t warm and friendly for a good reason. A gift receipt is a tax law document. On audit, the donor stands to lose his or her charitable deduction if he or she can’t produce a satisfactory gift receipt. Warm and friendly language should be presented in a separate communication.

What is a satisfactory gift receipt? The answer depends on the gift transaction. For any gift, the receipt must be received before the tax return due date (or filing date, if earlier) for the year the gift is made. For an outright gift of cash, the receipt must:

  • Contain a statement of the amount of cash donated.
  • Contain the “no goods or services” statement if the amount given was $250 or more.
  • State the date of gift.

The date-of-gift requirement can be a problem for a check that is mailed. According to IRS regs, the date of gift for a check that’s mailed to a charity is the date of mailing. The postmark date on the envelope containing the check is not necessarily the mailing date, but it is the last possible mailing date. Typically, the donee organization doesn’t know the mailing date.

In my view, which is not presented here as a legal opinion, a statement as to the date the check was received arguably satisfies the date-of-gift requirement.

It’s a pertinent fact. A more salient pertinent fact would be the postmark date. But most charities today don’t know the postmark date because they don’t keep or scan envelopes containing checks.

 
By Jon Tidd, J.D.

 
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