New IRS Gift-Substantiation Guidelines Opposed by National Council of Nonprofits

A new voluntary gift-substantiation regime proposed by the IRS is being opposed by the National Council of Nonprofits (NCN), as well as a number of individual state associations of nonprofits.

The system would provide an alternative to the “contemporaneous written acknowledgements” now in use by providing 501(c)(3) nonprofits with the option to report gifts more than $250 to the IRS by the donor’s social security number. Though it is not intended to be mandatory, it is seen as being confusing, unnecessary and potentially injurious to giving. NCN’s statement reads:

"The National Council of Nonprofits’ position is that the proposed voluntary-reporting regime is inappropriate because the process could impose significant costs and burdens on nonprofit organizations, would create public confusion and disincentives for donors to support the work of nonprofits, and could lead fraudulent actors to increase targeting donors and reputable nonprofit organizations."