The IRS is very specific about the way that tax-exempt organizations must recognize donations. You probably know that you have to prepare receipts for cash/check/credit card contributions of $250 or more. Remember to include the following on the receipt:
– Donor name and amount given
– Statement that no goods or services were provided in exchange for the gift
– Religious organizations must include that ‘intangible religious benefits’ were provided with no monetary value for tax purposes
Cash + goods/services
Where goods or services are provided, such as a dinner, donations greater than $75 also need written recognition. You must state that the amount deductible is limited to the amount in excess of the value of the goods or services provided. You must also provide a written statement of a good faith estimate for the value. Read more about quid pro quo contributions.
Non-cash items valued at $5,000 or more
If you dispose of a donation valued at $5,000+ within three years, then you need to file Form 8282 within 125 days of disposing of the item. If a) the items are consumed or distributed for charitable purposes, or b) the item has appraised value of a specific item was $500 or less, and the organization is provided Form 8283 as proof –then- Form 8282 is not required.
Cars/boats/airplanes File Form 1098-C from the IRS if you received a donation of a car, boat or plane. Call 800-829-3676 and ask for five copies.
If you award prizes for fundraisers such as sweepstakes or bingo, you need to file a Form W-2G prior to January 31 in the year following the one in which the prize was awarded. (Or, you can file the form when you distribute the prize.) The rules regarding federal withholding can be complex for prizes. It is best to reference the IRS instructions.
For the full story on charitable contributions, see IRS Publication 526.