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Don't let it happen to you!

 

Not "getting the words right" cost a couple dearly, as a recent article in the Journal of Accountancy illustrated.

(What, you can't find your copy? Okay, I'll tell you what it said.)

 

In a recent Tax Court case (Durden, T.C. Memo 2012-140), a couple's $22,000 deduction for contributions to their church was disallowed, because they did not receive a "contemporaneous" written acknowledgement stating that "no goods or services were received" in exchange for their contributions.

The Code and Regulations require "contemporaneous" written acknowledgements for contributions of $250 or more. "Contemporaneous" in this case means the taxpayer must have the statement - with the proper language included - in their possession by the time the tax return is filed. You can't correct it "after the fact."

The moral of this story is: check your acknowledgements to make sure the required language is there.

If it isn't, get a corrected acknowledgement before you file your return.