To avoid jeopardizing the tax deductibility of charitable contributions, churches should advise donors not to file their income tax returns until they have received a written acknowledgement of their contributions from the church. This communication should be in writing.
Richard Hammar in the Church Treasurer Alert suggests that the following notice be placed in a letter to donors or in the church bulletin:
Important Notice: To ensure the deductibility of your church contributions, do not file your income tax return until you have received a written acknowledgment of your contributions from the church. Some of your contributions may not be tax-deductible if you file your tax return before receiving a written acknowledgement of your contributions from the church.
The IRS rules basically prohibit a taxpayer from claiming a charitable deduction for any single gift over $250 unless the taxpayer has written acknowledgement from the church receiving the gift. For gifts under $250, the donor must have bank records (cancelled checks, etc.) or a written acknowledgement from the church before such can be claimed as a deductible charitable contribution. The Benefits Board suggests that churches provide written acknowledgement of all gifts, regardless of the amount, to all donors on at least an annual basis. To get suggestions on how to draft gift receipts, the church treasurer may visit the Benefits Board’s web site.