Federal Case
National Implications
Besaw v. Commissioner
Many donors assume a signed receipt is enough to claim a tax deduction for donated goods. But a recent Tax Court decision shows how missing details—even on legitimate gifts—can wipe out the entire deduction. Ministries that regularly receive donated items should take note: helping donors to correctly document their gifts protects their generosity.
What You Need to Know
In Besaw v. Commissioner, the U.S. Tax Court denied a taxpayer’s $6,760 deduction for noncash charitable donations—not because he failed to give, but because his paperwork fell short. Mr. Besaw donated household items to several charities and received receipts signed by employees. However, the sections describing what he gave were left blank.
When the IRS audited him years later, he provided reconstructed lists of the items, their values, and dates. The court acknowledged his sincerity but ruled that these after-the-fact records didn’t meet the IRS’s requirement for contemporaneous documentation. As a result, the court disallowed the entire deduction, upholding the IRS’s ruling. The case is final and cannot be appealed.
What Your Ministry Can Do
Provide Complete Receipts: Ensure every acknowledgment for donated goods includes your organization’s name, the date and location of donation, and a detailed description of each item received. For donations of $250 or more, include a statement confirming whether any goods or services were provided in return.
Train Staff and Volunteers: Educate all personnel who handle donations about IRS documentation rules and ensure receipts are completed at the time of contribution.
Maintain Records: Keep digital and paper copies of all donation records for at least three years, so you can verify what was received if questions arise later.
