The Practicon Viewpoint by Ann Page Griffin

ONE MORE TIME: WHERE CAN YOU FIND INVALUABLE TIPS FOR MANAGING YOUR PRACTICE AND PERSONAL BUSINESS?

The short answer: The McGill Advisory, a monthly newsletter filled with a wide variety of ideas, suggestions, strategies, methods, and specific actions to help you earn and keep more income, manage all aspects of your practice, plan and implement steps to assure a comfortable retirement, and on and on...

The following example of the type of information shared in The Advisory comes from the January 2019 issue. The article, entitled "Beware—IRS is Trying to 'Scrooge' You Out of Your Charitable Contribution Deductions!", informs readers that the IRS requires a statement from any charity to which you donate cash that clearly identifies the donation as tax deductible. Who knew?
In a paragraph subtitled "Cash Donations of $250 or More—You Need More!":

In order to deduct cash contributions at this level, you must also provide a Contemporaneous Written Acknowledgment from the charity stating the date and amount of your donation and a statement that "No goods or services were received by (you) in exchange for the contribution."

The narrative goes on:

In Durden v. Commissioner, TC Memo 2012-140, the taxpayer received a receipt for contributions of $25,171 made to his church before he filed his tax return. Unfortunately, that receipt did not state that "No goods or services were received in exchange for the contribution." The church later sent a second receipt containing these required magic words, but it was received after the taxpayer had filed his tax return. The IRS disallowed the deduction saying that the written receipt was not contemporaneous, and the Tax Court agreed, nailing the taxpayer for over $7,000 in additional taxes, plus interest and penalties.

You can bet that I'll now ask my church and other charities that receive donations from me to add the phrase, "No goods or services were received in exchange for this contribution" to all receipts. You might want to do the same. Had I not read the article in The McGill Advisory, the tax trap described above could have cost me money also.

Please note: I have no affiliation whatsoever with The McGill Advisory other than recommending it to consulting clients and to readers. It is, in my opinion, the best source for pertinent, practical tips that affect your practice and personal/family current and future business situations. For more information, visit The McGill Advisory online, or reach the McGill & Hill Group by email at newsletter@mcgillhillgroup.com or by telephone at 888-249-7537.

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