The IRS has withdrawn its proposed substantiation requirement for certain contributions–a regulation that would have allowed nonprofits to file an additional information return to substantiate contributions of $250 and more.  The proposed framework for donee reporting would have included the donor’s name, address, and social security number or tax identification number.

Nonprofit leaders voiced concerns to the IRS during a formal comment process that ended in mid-December, citing problems with donor privacy and onerous reporting that would burden small staffs.  Many feared the regulations, although optional as proposed, would eventually become a requirement. 

"The Treasury Department and the IRS received a substantial number of public comments in response to the notice of proposed rulemaking. Many of these public comments questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers," writes Karen Schiller, Department of Treasury's acting deputy commissioner for services and enforcement.  "Accordingly the notice of proposed rulemaking is being withdrawn."

Read the Withdrawal of Notice of Proposed Rulemaking to be published in the Federal Register.

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