Importance of Substantiating Charitable Income Tax Deductions

By Jenny Wang, CPA

A recent U.S. Tax Court case, Albrecht v. Commissioner of Internal Revenue, No. 13314-20, T.C. Memo 2022-53, highlights the importance of substantiating charitable income tax deductions, including having a valid "contemporaneous written acknowledgement" (CWA) to support any charitable contribution of $250 or more.

In this case, the tax court stated that the requirements to obtain a CWA is a “strict one” and ruled that the taxpayer had not met the substantiation requirements because the CWA did not specify whether the donee provided any goods or services in return for the donation or state that it represented the entire agreement between the donee and the taxpayer. 

Decision reinforces substantiating charitable tax deductions: PwC