Once again, the cost of not having a well written thank you note from a public charity for a donation has led to the denial of a large charitable deduction by the Courts.
Last year, the Tax Court issued a Memorandum Decision in the case of Martha L. Albrecht v. Commissioner T.C. Memo 2022-53 which denied a deduction for the donation of a large collection of Native American jewelry and artifacts to the Wheelwright Museum of the American Indian late in 2014. The Museum and Mrs. Albrecht executed a Deed of Gift which recited the terms of donation and the items being donated, and referred to a “Gift Agreement,” but no such agreement was provided by the Museum. Mrs. Albrecht listed the fair market value of the donated jewelry and artifacts as a charitable income tax deduction on her 2014 Form 1040. The IRS denied the deduction on the basis that the high level of substantiation requirements on charitable gifts, and the Tax Court upheld the denial. This denial is a result of the Museum not writing a good enough “contemporaneous written acknowledgement” (CWA) to substantiate the gift. In other words, the museum did not write a proper thank you letter.
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