IRS Withdraws Donation Substantiation Proposal

After pushback from the charitable sector as well as from a number of lawmakers, the Internal Revenue Service today withdrew a rule proposed in September to create an alternative method of substantiating charitable donations of $250 or more. The proposed rule, an alternative to the “contemporaneous written acknowledgement” requirement, would have enabled charities to file a new information return each year, listing donors who gave contributions of more than $250 along with their taxpayer identification numbers or Social Security numbers. Nonprofit organizations expressed concern about the risks involved with collection of Social Security numbers and submitted thousands of public comments in opposition to the proposal. Additionally, legislation was introduced in both chambers of Congress to limit or block the proposal. The withdrawal came in a Federal Register notice scheduled to be published tomorrow.

Sources: BNA Daily Tax Report, Washington Council Ernst & Young

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