IRS Drops Proposed Regulation for Donee Reporting
By Ashley Cooper, HoganTaylor Tax Manager
The IRS has dropped the proposed regulations that established new information return reporting to substantiate charitable gifts over $250, which would include the donor’s social security numbers. After the IRS received over 38,000 comments by the December 16th deadline, it was clear that this proposed regulation’s original intentions backfired. All of these comments led to a House Bill, the Charitable Giving Privacy and Protection Act, which was introduced on December 17th. This bill would prevent the rules from being implemented by disallowing the use of social security numbers of donors in charitable contribution substantiation acknowledgements.
The Withdrawal Notice concludes that in response to all of the comments received, the IRS and Department of Treasury have decided against executing the exception to the contemporaneous written acknowledgement requirement. They have made it clear that the exception will not be available unless final regulations are issued prescribing the method for donee reporting.