Could a Missing Charity Letter Cost You a Tax Deduction?

What is a contemporaneous written acknowledgment?

A contemporaneous written acknowledgment, or CWA, is a letter from the charitable organization documenting certain contributions. Larry explains that for a single charitable contribution of $250 or more, the donor must receive acknowledgment by the applicable filing deadline.

The letter should document the contribution and include specific information about whether goods or services were provided in exchange.

What information should a charitable acknowledgment include?

Larry explains that the acknowledgment should include the name of the organization, the amount of a cash contribution, or a description of donated property, and a statement explaining whether goods or services were provided in exchange.

If something was received in return, such as a meal at a fundraising event, the value of those goods or services should also be reflected in the acknowledgment.

Is a canceled check or credit card statement enough for a charitable deduction?

Not always. Larry emphasizes that proof of payment may not satisfy all documentation requirements for a charitable contribution.

For contributions that require a contemporaneous written acknowledgment, the donor still needs the appropriate letter from the charitable organization. That distinction is one of the main reasons taxpayers can run into problems even when they believe they have proof of the donation.

When do you need Form 8283 for a charitable contribution?

Larry explains that Form 8283 applies when noncash charitable contributions exceed $500 during the year. The form identifies what was donated and the organization that received the property.

For larger noncash donations, additional documentation may also be required, which is why Larry stresses understanding the rules before making the contribution rather than trying to correct the paperwork afterward.

When might you need an appraisal for donated property?

Larry discusses appraisal requirements for larger noncash donations and gives examples involving real estate, household goods and clothing. In the episode, he explains that donations of similar property may need to be considered together when determining whether the value crosses the appraisal threshold.

His broader point is that donors should understand the documentation requirements before giving away valuable property.

Why is the timing of a charitable acknowledgment important?

Larry explains that the acknowledgment must be received within the required timeframe. His example involves someone filing a tax return before receiving the charity’s letter and later discovering that the contribution could be disallowed because the acknowledgment arrived too late.

That is why keeping the letter and confirming receipt before filing can be an important part of charitable donation documentation.

Should you keep charitable acknowledgment letters after receiving them?

Yes. Larry specifically warns against throwing these letters away after receiving them. If the contribution is later questioned, the taxpayer may need to produce the acknowledgment.

His practical takeaway is simple: when a charity sends documentation supporting a contribution, keep it with your tax records instead of treating it as a routine thank-you letter.