November 1, 2001 | Read Time: 1 minute
An online shopper who contributes to charity a rebate offered by an Internet shopping mall may deduct the amount of the rebate from income taxes, the Internal Revenue Service ruled in response to a request from the shopper.
A company that ran an online shopping site, featuring links to an array of retailers, offered its customers a rebate on purchases made through its Web page, and gave them the option of donating the rebate to charity. Customers could go directly to the mall site or they could enter the site through a link on the Web sites of charities that participated in the rebate program.
If shoppers chose to donate their rebates, the company transferred the money to charity and provided them with a written acknowledgment of the gift.
While the ruling applies only to the specific case involved, it serves as an indication of the IRS’s thinking on such online rebate-donation arrangements. As is its custom, the IRS did not identify the charity, company, or shopper involved (Letter Ruling 200142019).
