June 28, 2001 | Read Time: 1 minute
By GRANT WILLIAMS
The U.S. Tax Court has issued an opinion that serves as a reminder to donors that they can’t simply claim charitable-contribution deductions without having adequate proof that they made the gifts.
Marshall and Nancy Gardner, who lived in Philadelphia, reported on their 1995 joint federal income tax return that they had made $8,275 in charitable contributions. The Gardners did not have receipts for the gifts, and the I.R.S. ruled that they could not take charitable deductions.
When the case went to trial, Mr. Gardner produced “an undated sheet of paper containing various handwritten items and amounts,” according to the Tax Court, that he said he used to prepare the couple’s tax return. The notations on the paper were “estimates,” Mr. Gardner told the court, based on “how many times I might have given.” The notes included “clothing donations at local churches,” without naming the churches.
In its ruling, the Tax Court said that charitable deductions “are strictly a matter of legislative grace” offered by Congress and that taxpayers must maintain records sufficient to substantiate their claimed deductions.
“The applicable regulations require a taxpayer to maintain for each contribution of money a canceled check, a receipt from the donee organization showing the date and amount of the contribution, or other reliable written records showing the name of the donee and the date and the amount of the contribution,” the court said.
The sheet of paper provided by the Gardners “does nothing to support” their charitable-deduction claims, the court said, concluding that it was “not convinced from the record” that the couple made the gifts (Marshall Stewart Gardner and Nancy B. Gardner v. Commissioner of Internal Revenue, T.C. Summary Opinion 2001-82).
