Disclosures
IRS Public Inspection of Annual Returns and Exemption Applications
ref: Compliance Guide for Public Charities (IRS)
A public charity must make the following documents available for public inspection and copying upon request and without charge (except for a reasonable charge for copying). The IRS also makes these documents available for public inspection and copying :
Exemption Application – A public charity must make available for public inspection its exemption application, Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, or Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, along with: all documents submitted with Form 1023, all documents the IRS requires the organization to submit in support of its application, and the exemption ruling letter issued by the IRS.
Annual Information Return – A public charity must make available for public inspection its annual information return (Form 990 series) with schedules, attachments and supporting documents filed with the IRS. However, a public charity that files a Form 990 or Form 990-EZ does not have to disclose the names and addresses of contributors listed on Schedule B
Charitable Contributions
Substantiation and Disclosure
A public charity should be aware of the substantiation and record keeping rules imposed on donors who intend to claim a charitable contribution deduction and the disclosure rules imposed on charities that receive certain quid pro quo contributions.
Record keeping Rules
A donor cannot claim a tax deduction for any cash, check or other monetary contribution unless the donor maintains a record of the contribution in the form of either a bank record (such as a cancelled check) or a written communication from the charity (such as a receipt or a letter) showing the name of the charity, date and amount of the contribution.
Substantiation Rules
A donor cannot claim a tax deduction for any single contribution of $250 or more unless the donor obtains a contemporaneous written acknowledgment of the contribution from the recipient public charity. A public charity may assist the donor by providing a timely written statement including the name of the public charity, date and amount of any cash contribution and description of any non-cash contributions. In addition, the acknowledgment should indicate whether any goods or services were provided in return for the contribution. If any goods or services were provided in return for a contribution, the organization should provide a description and good faith estimate of the value of the goods or services. The public charity may either provide separate acknowledgments for each single contribution of $250 or more or one acknowledgment to substantiate several single contributions of $250 or more. Separate contributions are not aggregated for purposes of measuring the $250 threshold. There are no IRS forms for the acknowledgment. Letters, postcards or computer generated forms with the above information are acceptable. An organization can provide either a paper copy of the acknowledgment or an electronic acknowledgment, such as an email, to the donor.
Disclosure Rules That Apply to Quid Pro Quo Contributions
Contributions are deductible only to the extent that they are gifts and no consideration is received in return. Depending on the circumstances, ticket purchases and similar payments made in conjunction with fundraising events may not qualify as charitable contributions in full. A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. A donor may only take a charitable contribution deduction to the extent that the contribution exceeds the fair market value of the goods and services the donor receives in return for the contribution. If a public charity conducts fundraising events such as benefit dinners, shows and membership drives, where something of value is given to those in attendance, it must provide a written statement informing donors of the fair market value of the specific items or services it provided in exchange for contributions. Token items and services of intangible religious value need not be considered. A public charity should provide the written disclosure statement in advance of any event, determine the fair market value of any benefit received and state this information in fundraising materials such as solicitations, tickets and receipts. The disclosure statement should be made, at the latest, at the time payment is received. Subject to certain exceptions, the disclosure responsibility applies to any fundraising circumstance where each complete payment, including the contribution portion, exceeds $75.
For more information, see IRS Publication 557
Read DEDUCTIONS OF CONTRIBUTIONS TO IRC 501(c)(3) ORGANIZATIONS AND OTHER EXEMPT ORGANIZATIONS
