Charitable giving remains an effective way to align tax planning with philanthropic goals. But recent Tax Court decisions reinforce a practical lesson for donors and advisors: the deduction is not secured by generosity alone; it depends on timely, technically compliant documentation.
The IRS and courts apply IRC §170’s substantiation rules, even when the gift itself is undisputed. Documentation should therefore be addressed before the gift is completed and before the return is filed.
The $250 Rule: Contemporaneous Written Acknowledgments
For any single contribution of $250 or more, IRC §170(f)(8) requires the donor to obtain a contemporaneous written acknowledgment (CWA) from the donee organization before the earlier of the date the return is filed or its due date, including extensions.
- For cash gifts, the acknowledgment must state the amount contributed.
- For property gifts, it must describe the property contributed.
- The acknowledgment must state whether the charity provided goods or services in exchange for the gift and, if so, include a good-faith estimate of their value or state that only intangible religious benefits were provided.
The $250 threshold applies separately to each contribution, not to total annual giving. Multiple gifts under $250 generally do not trigger the CWA requirement merely because they exceed $250 in the aggregate, but each separate gift of $250 or more must be covered by a valid acknowledgment.
This requirement is unforgiving. In
Martin v. Commissioner, the Tax Court disallowed real-property charitable deductions where the acknowledgments failed to state whether the donee provided goods or services. The documents otherwise reflected a donation, but the missing statutory statement was fatal. The Tax Court applied the same rule again in
Wells v. Commissioner, disallowing multimillion-dollar carryover deductions for a real-property donation because the acknowledgment did not state whether the donee provided goods or services.
The rule isn’t limited to property donations. In
Durden v. Commissioner, the Tax Court disallowed deductions for cash contributions to the taxpayers' church because the church's acknowledgment omitted the goods-or-services statement, and a corrected acknowledgment obtained after the return was filed was not contemporaneous.
Noncash Gifts: Form 8283 and Qualified Appraisals
Noncash gifts are subject to an additional substantiation regime that goes beyond the CWA rules. Under IRC §170(f)(11) and the related regulations, the required documentation depends on the type and value of the property contributed. Depending on the amount claimed, the donor may need reliable written records, Form 8283, a qualified appraisal, or a combination of these items. Form 8283 reports key information about the property contribution, but it is not a substitute for a qualified appraisal when one is required.
In recent cases, including
Cade v. Commissioner and
Besaw v. Commissioner, taxpayers lost deductions where appraisals, descriptions, or receipts did not satisfy the applicable substantiation requirements. Courts have also denied deductions for incomplete forms. In
RERI Holdings I, LLC v. Commissioner, the Tax Court disallowed a $33 million deduction in full because the donor left the cost or adjusted basis blank on Form 8283, and the court reached the same result in
Oakhill Woods, LLC v. Commissioner, where basis information was omitted.
2026 Planning Considerations
Beginning in 2026, the One Big Beautiful Bill Act adds new charitable giving considerations. Non-itemizers may claim a deduction for certain cash gifts, generally up to $1,000 for single filers and $2,000 for joint filers.
Itemizers generally may deduct charitable contributions only to the extent aggregate contributions exceed 0.5% of adjusted gross income, and corporations are subject to a new 1% taxable income floor. For itemizers in the top (37%) bracket, the value of itemized deductions, including charitable contributions, is also capped at 35 cents per dollar beginning in 2026.
These changes may affect timing strategies, including whether to bunch gifts or coordinate larger contributions with donor-advised funds, charitable trusts, or other giving vehicles. They do not, however, relax the documentation rules.
Practical Steps for Donors
- Obtain a complete CWA for every single contribution of $250 or more.
- Confirm that each acknowledgment states whether goods or services were provided.
- For noncash gifts, determine early whether Form 8283 and a qualified appraisal are required.
- Review year-end giving plans in light of the new 2026 charitable deduction floors and limitations.
The good news is that getting this right is entirely doable. Give your documentation the same care you would give any important tax position and take care of it up front rather than at filing time, so your generosity delivers the full tax benefit you intended.
Published: 07/06/2026
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