Changes Related to Charitable Giving

You have probably heard that most charitable contributions to nonprofit organizations are a good way to receive a tax break. Maybe you have even received tax breaks for this in the past.   

Fortunately, it is still true that you can deduct charitable contributions from your taxes. It’s also true, however, that there is now a new revenue procedure, Rev.Proc 2018-32, that features all the information you need to know about charitable giving in one convenient place. This is much better than, in the past, when you had to find information across several different documents.

Easy to Use Databases

The smart change of a new revenue procedure is not the only change. Now, there are also five searchable databases that people can use to help them find the information they need.

These include:

l  The Tax Exempt Organization Search

l  The Automatic Revocation of Exemption List

l  A database of of images of Forms 990, Return of Organization Exempt from Income Tax

l  A database of images of IRS determination letters issued after January 1, 2014

l  A database of information reported by tax exempt organizations only required to file Form 990-N

By using these databases carefully, you can easily get information on different charitable organizations and then make an informed decision about whether or not you wish to donate to them.

Reliance Rules

Another recent change is that the reliance rules for donors have changed somewhat as well.

To start with, under the new rules, contributors can rely on or believe in determination letters or ruling information that they found in the Tax Exempt Organization Search database.

Of course, there are some exceptions tot he reliance rule, such as when the donor was aware of revocation of tax deductible status, took part in revocation of the status, and other select situations.

If you have questions about the reliance rules, other changes made during the updating of the revenue procedure, or general concerns about an organization you are thinking of donating to, remember that you can always call on the advice of a tax professional.