Write-Offs: IRS Eases Receipt Rule, Estate-Tax Vote Expected, and Ruling on September 11 Case
By GRANT WILLIAMS
Contributor
April 4, 2002 | Read Time: 2 minutes
- Recognizing that charities may have trouble keeping up with the flood of gifts they have received in the wake of the terrorist attacks, the IRS will ease its proof-of-donation rules for people who wish to claim deductions on some gifts of $250 or more. Under current law, in order to claim a deduction, donors must receive written acknowledgment of such gifts from the recipient charity by the date the individuals file their income-tax returns. The IRS says that gifts made from September 11 to December 30, 2002, may be deducted without such a receipt, so long as donors either receive the acknowledgments by October 15 of this year, or can prove that they have requested the receipts.
- The IRS has told an aquarium in the New York City area that it could assist with a “public emergency” and use its 333-seat whale-watching boat to ferry commuters in need of transportation following the September 11 terrorist attacks — without paying taxes that would be levied on a business unrelated to the charity’s mission. The aquarium planned to hire a company to help with the ferry operation and said it would make no profit from the short-term transportation service (Letter Ruling 200204051).
- The House of Representatives may soon vote on a bill that would make permanent many of the tax cuts adopted last year, including a repeal of the estate tax. The bill is being closely watched by nonprofit groups, some of which fear that elimination of the estate tax would hurt charitable giving because a desire to avoid the tax would no longer be an incentive for donors to give. Congressional supporters of the bill say that people planning their estates need to be certain whether their estates would be subject to the tax after their deaths. Under tax legislation enacted last year, the estate tax will be gradually reduced until 2010, when it will be repealed for one year before being restored.
