IRS Gift Substantiation Proposal

Date Posted: 11/22/2017
Last Updated: 5/30/2024


The IRS recently published proposed regulations regarding the “contemporaneous written acknowledgement” requirement for contributions of $250 or more. Under current law, nonprofits must “contemporaneously” provide donors certain written information (such as “the amount of cash and a description of any property other than cash contributed” and “whether any goods and services were provided by the donee organization in consideration for the contribution”). The IRS is proposing that nonprofits, on a voluntary basis at this time, file an additional new information return with the IRS by February 28 every year and give a copy of it by that date to each contributor of $250 or more to substantiate the contribution. The return would require, among other things, the nonprofit to collect the donor’s Social Security number (which would impose other legal requirements on nonprofits to retain and protect those Social Security numbers from identify theft). This troubling proposal has been considered and rejected in the past. The National Council of Nonprofits has prepared an excellent analysis of why this proposal is of serious concern to nonprofits and donors.

The IRS is accepting public comments on the proposed rule change through December 16. The Center recently submitted comments expressing our concerns with this proposal.


We have heard from many nonprofits that this proposal would be a major burden for them and would create privacy concerns for their donors. Here are two ways you can take action today:


  1. Let us know how this proposal would affect your nonprofit, so the Center can provide input to the IRS about the problems this would cause for North Carolina nonprofits. Thank you if you have already shared your concerns with us.
  2. Submit comments to the IRS explaining your concerns. The IRS is much more likely to withdraw this proposal if it hears from a wide range of nonprofits and donors about the problems this would cause. The National Council of Nonprofits has prepared very helpful information on submitting comments, including sample comments on the gift substantiation proposal.