As a pastor, clerk, or church treasurer, you should make sure that any person who contributed more than $250 to your church within the year in a single gift gets a letter of acknowledgement from your church at least by the end of January of the following year. The acknowledgement should be on church letterhead and should be signed by the treasurer and/or the pastor. It should include the amount of the gift(s), and whether or not the person received anything in return for the gift. If there was nothing given in return, you should add a provision that says that “no goods or services were provided in return for the contribution other than intangible religious benefits, but such benefits are not valued for tax purposes.”
Other points to consider concerning acknowledgements for charitable contributions:
- Aggregate contributions that total more than $250 are not required to be acknowledged by the church. For example, if a member of your church gave a check of $200 each week, the church is not required under IRS regulations to provide acknowledgement even though the contributions for the year would total over $10,000. However, we recommend that all contributions be acknowledged by the church. If there is no acknowledgement, cancels checks can be used for contributions less than $250. But again, make it simple for people to give to your church – give them a yearly (or maybe even quarterly) list of their contributions.
- Sample contribution letters can be found on the Benefits Board’s web site at www.benefitsboard.com under the Treasurer’s Manual and in the forms section. Samples can also be found in IRS Publication 1771 at www.irs.gov.
- A donor cannot claim a tax deduction for charitable contributions over $250 (single gift) unless he has written acknowledgement of the gift. The acknowledgement must be in his possession prior to the filing of his tax return for him to be able to claim the deduction.
- According to IRS publications, acknowledgement can now be provided by the church to the donor electronically, i.e. by e-mail.
The church should always seek to make sure that its donors are provided sufficient information to comply with tax laws.