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Controversial Charitable Donation Rules Withdrawn

by Sally P. Schreiber, J.D. | Jan 12, 2016   ()

On Thursday, the IRS announced that it is withdrawing proposed regulations released last September that would have allowed charities to file information returns with the IRS and donors instead of providing contemporaneous written acknowledgments of charitable donations (REG-138344-13). Charities that elected to use the new procedure would have been required to obtain donors’ Social Security or other tax identification numbers (TINs) to complete the information return.

The IRS says it received a “substantial number of public comments” in response to the proposed regulations, and the government’s portal for comment submissions shows it received almost 38,000 comments, the vast majority of which appear to strongly oppose the rules.

Many commenters objected to the requirement to obtain and maintain donors’ TINs, which posed a threat of identity theft. They also expressed concern that having to provide a Social Security number to the charity would discourage many potential donors. One commenter said the requirement would be the “death knell of charitable giving as we know it today.”

Commenters also expressed the belief that, although donor reporting was proposed as voluntary, it would eventually become mandatory.

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Source: The Tax Adviser
Source: The Tax Adviser

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