New IRS Regulations

In addition to the existing requirements for acknowledgement of contributions, the IRS has new regulations for gifts of less than $250 that affect every church! Recordkeeping requirements for cash and check contribution of less than $250 have changed for contributions received after August 17, 2006. The new regulation requires all individual cash and check contributions to be substantiated by either a bank record (a cancelled check) or written statement from the church showing the name of the church, the name of the donor, the date of the contribution, and the amount of the contribution.

The substantiation requirements for contributions of $250 or more have not changed. Thus, it appears advisory that churches consider acknowledging all contributions in writing.

Numerous tax law changes were included in the Pension Protection Act of 2006. For more information contact your CPA or visit www.irs.gov.

Robin D. Nichols, Financial Services, MBCB