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Preserving the Charitable Deduction and Avoiding Traps for the Unwary: Substantiation and Acknowledgment Rules

  • Accountant
  • AFSP
  • CRTP
  • CGFM
  • CPA (US)
  • EA
  • ORTP
  • CPA/PFS
  • ChFC
  • MRTP
  • FSCP
  • CASL
  • ChSNC
  • RICP
  • WMCP
  • CFIRS
  • CWS

Published: September, 2022

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  • Course Description
  • Course Qualification
  • Presenter
  • FAQ

Course Description

Overview

  • Substantiation requirements
    10 mins
  • Good faith estimate
    18 mins
  • Cash contributions $250 or more
    33 mins
  • Property donations over $5000
    40 mins
  • Property donations
    43 mins

Course Description

Assume that a donor contributes to a charity and the charity provides some goods or services to the donor. Essentially the charity is receiving the contributed property partly as a contribution and partly in consideration for the goods or services that the charity is furnishing to the donor. The Internal Revenue Code requires the charity to disclose whether any goods or services were provided in consideration for the donation.

The charity must also make a good faith estimate of the value of the goods or services provided. The math for consideration is simple. The greater the number of goods or services disclosed as consideration, the smaller the deduction. The opposite is also true: the smaller the number of goods and services disclosed, the greater the charitable deduction.

The donor must obtain an acknowledgment from the charity. Also, if the donor is aware of consideration not disclosed on the acknowledgment, the donor may not be able to rely on the timely acknowledgment from the charity and the entire amount of the contribution may be disallowed.

This CE/CPE Tax course will address the basic rules for substantiation of charitable contributions and written acknowledgments.

Three cases illustrate the disallowance of a charitable contribution where the taxpayers had reason to know about the consideration that was not disclosed in the acknowledgments.

This Online Webinar by Louis Michelson will discuss the substantiation and acknowledgment rules in the context of charitable deductions including:

  • An Overview of Substantiation Rules
    • IRC Section 170(f)(8)
    • Publication 1771
    • Donor obligation
  • Contemporaneous Written Acknowledgments
    • Required disclosures
    • Contemporaneous requirement
    • Illustration
    • Examples of Written Acknowledgments
  • Good Faith Estimate and Examples
    • Consequences of failure to disclose
    • Illustrative cases
    • Strict compliance
    • Substantial Compliance
  • Property Donations
    • Special substantiation rules for property donations
    • Amount/value of contributions
    • When appraisals are needed

Learning Objectives

  • To identify quid pro quo contributions.
  • To analyze how to identify what needs to be included in written acknowledgments.
  • To discuss whether an acknowledgment is contemporaneous.
  • To identify records needed to prove the number of contributions.
  • To recognize the factors for substantiation of charitable contributions.
  • To identify consequences of failure to disclose consideration.
  • To analyze what a good faith estimate of goods or services provided is.

Recommended For

  • This IRS-Approved CE course is recommended for CPA, EA, AFSP, CRTP, MRTP, ORTP, CGFM, ChFCA, CASL, ChSNC, RICP, WMCP, FSCP, PFS, CFIRS, CWS, and Other Tax Professionals who want to understand the Substantiation and Acknowledgment Rules.

Who Should Attend?

  • California Registered Tax Professional
  • Certified Public Accountant (CPA)
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • Maryland Tax Preparers
  • Oregon Tax Preparers
  • Tax Preparer
  • Tax Professionals
  • Tax Pros
  • Young CPA

Course Qualification

Webinar Qualifies For

  • 1 General Credit of Taxes for Accountant/Bookkeeper/Tax Professionals
  • 1 CE Credit of Federal tax-related matters for Annual Filing Season Program (AFSP)
  • 1 CE Credit of Federal tax-related matters for California Registered Tax Preparers (CRTP) (Approval No. 6273-CE-1054)
  • 1 CE Credit of Federal tax-related matters for Enrolled Agents (EA) (Approval No. GEHNZ-T-01313-22-S)
  • 1 CE Credit of Federal tax-related matters for Oregon Registered Tax Preparers (ORTP) (Approval No. GEHNZ-T-01313-22-S)
  • 1 CE Credit of Federal tax-related matters for Maryland Tax Preparer (MRTP) (Approval No. GEHNZ-T-01313-22-S)
  • 1 CPE Credit of Taxes for Certified Public Accountants (CPA-US)
  • 1 CPE Credit of Taxes for Certified Government Financial Manager (CGFM)
  • 1 CPD Credit of Taxes for Personal Financial Specialist (PFS)
  • 1 CPE Credit of Taxes for Chartered Financial Consultant (ChFC)
  • 1 CPE Credit of Taxes for Financial Services Certified Professional (FSCP)
  • 1 CPE Credit of Taxes for Chartered Advisor in Senior Living (CASL)
  • 1 CPE Credit of Taxes for Chartered Special Needs Consultant (ChSNC)
  • 1 CPE Credit of Taxes for Retirement Income Certified Professional (RICP)
  • 1 CPE Credit of Taxes for Wealth Management Certified Professional (WMCP)
  • 1 CE Credit of Taxes for Certified Fiduciary & Investment Risk Specialist (CFIRS)
  • 1 CE Credit of Taxes for Certified Wealth Strategist (CWS)

Additional details

  • Course Level :
    Basic
  • Credits :
    1
  • Instructional Method :
    QAS Self Study
  • Pre-requisites :
    None
  • Advance Preparation :
    None

IRS APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor Id#: GEHNZ) has entered into an agreement with the Internal Revenue Service, to meet the requirements of 31 Code of Federal Regulations, section 10.6(g), covering maintenance of attendance records, retention of program outlines, qualifications of instructors, and length of class hours. This agreement does not constitute an endorsement by the IRS as to the quality of the program or its contribution to the professional competence of the enrolled individual. Credit earned by attendees with a PTIN will be reported directly to the IRS as required of all providers. To ensure your CPE hours are reported, update your profile in My Account to include your PTIN number. Please note: IRS CE is only mandatory for EAs and ERPAs. For all other tax return preparers, CE is voluntary.

NASBA APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor Id#: 143597) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.NASBARegistry.org.

CTEC APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor ID# : 6273) has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, toll-free by phone at (877) 850-2832, or on the Internet at www.ctec.org.

Presenter

About Presenter

Louis Michelson

President, Louis E Michelson, A Professional Corporation

Mr. Michelson received his B.A. Degree, with general honors from the University of Chicago, his M.S. in Accountancy from DePaul University and his J.D. degree from UCLA School of Law. He has been admitted to practice with the U.S. Tax Court and the United States District Court, Central District of California.

Mr. Michelson is Past Chair of the Nonprofit Organizations Committee of the Business Law Section of the California Lawyers Association. He has served as Chair of the Tax-Exempt Organizations Committee of the Taxation Section of the State Bar of California, as Co-Chair of the Nonprofit Organizations Committee of the Business Law Section of the State Bar of California and as Chair of the Taxation Section of the Los Angeles County Bar Association. In May 2001 he participated in the Los Angeles County/California State Bar delegation to the Internal Revenue Service, Treasury and staff of the Congressional tax committees in Washington D.C. to discuss proposed guidance, as set forth in a co-authored paper, “Getting Connected: Business and Politics of Charities on the Internet.”  Together with other attorneys, he assisted in reviewing and suggesting revisions to portions of the California Attorney General’s Guide to Charities. Mr. Michelson is a lecturer at UCLA Extension on tax issues for nonprofit organizations. He is also Adjunct Professor at David Nazarian College of Business and Economics California State University Northridge for a class on income taxation of trusts and estates. He has lectured for business and professional organizations and written articles on various federal and California tax topics. He is a member of the American, California, and Los Angeles County Bar Associations.

About Company

Louis E Michelson, A Professional Corporation

lemtax.com/

Louis E. Michelson focuses his practice on income tax planning, charitable giving and other federal, state and local taxation issues for individuals, corporations and tax-exempt organizations.

Mr. Michelson advises public charities, private foundations, religious and educational organizations, and other nonprofit organizations on issues of formation, management, joint ventures, planned giving and board governance. He also has extensive experience with income tax planning for business transactions and estate planning.


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