Substantiation Requirement for Certain Contributions, 55802-55805 [2015-23291]
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Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Proposed Rules
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NOS–2015–0099, by any of the
following methods:
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FOR FURTHER INFORMATION CONTACT:
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mbnmsmanagementplan@noaa.gov.
SUPPLEMENTARY INFORMATION:
On August 27, 2015, NOAA published
a notice of intent in the Federal Register
(80 FR 51973) to initiate public scoping
for the management plan review for
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correct docket number is NOAA–NOS–
2015–0099. This notice makes a
correction to the docket number for the
online submission of public comments.
In addition, this notice alerts the
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Authority: 16 U.S.C. 1431 et seq.; 16
U.S.C. 470.
Dated: September 9, 2015.
John Armor,
Acting Director, Office of National Marine
Sanctuaries.
[FR Doc. 2015–23417 Filed 9–16–15; 8:45 am]
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
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Internal Revenue Service
Food and Drug Administration
26 CFR Part 1
21 CFR Part 1
[REG–138344–13]
RIN 1545–BL94
[Docket No. FDA–2011–N–0146]
Substantiation Requirement for Certain
Contributions
RIN 0910–AH23
User Fee Program To Provide for
Accreditation of Third-Party Auditors/
Certification Bodies To Conduct Food
Safety Audits and To Issue
Certifications; Correction
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Proposed rule; correction.
The Food and Drug
Administration (FDA or we) is
correcting a document that appeared in
the Federal Register of July 24, 2015,
entitled ‘‘User Fee Program for
Accreditation of Third-Party Auditors/
Certification Bodies To Conduct Food
Safety Audits and To Issue
Certifications.’’ That document
proposed amending the document,
‘‘Accreditation of Third-Party Auditors/
Certification Bodies to Conduct Food
Safety Audits and to Issue
Certifications,’’ and proposed
establishing a reimbursement (user fee)
program to assess fees and require
reimbursement for the work performed
to establish and administer the system
for the Accreditation of Third-Party
Auditors under the FDA Food Safety
Modernization Act (FSMA). The
document was published with an
incorrect RIN. This document corrects
that error.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Charlotte Christin, Center for Food
Safety and Applied Nutrition, Food and
Drug Administration, 5100 Paint Branch
Pkwy., College Park, MD 20740, 240–
402–3708.
In FR Doc.
2015–18141, in the Federal Register of
July 24, 2015 (80 FR 43987), appearing
on page 43987, in the second column,
the RIN number heading is corrected to
read ‘‘RIN 0910–AH23.’’
SUPPLEMENTARY INFORMATION:
Dated: September 11, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015–23333 Filed 9–16–15; 8:45 am]
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DEPARTMENT OF THE TREASURY
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Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking.
AGENCY:
This document contains
proposed regulations to implement the
exception to the ‘‘contemporaneous
written acknowledgement’’ requirement
for substantiating charitable
contribution deductions of $250 or
more. These proposed regulations
provide rules concerning the time and
manner for donee organizations to file
information returns that report the
required information about
contributions (donee reporting).
DATES: Written or electronic comments
must be received by December 16, 2015.
ADDRESSES: Send submissions to
CC:PA:LPD:PR (REG–138344–13), Room
5203, Internal Revenue Service, POB
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be handdelivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to: CC:PA:LPD:PR (REG–138344–13),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent electronically
via the Federal eRulemaking Portal at
www.regulations.gov (IRS REG–138344–
13).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Robert Basso at (202) 317–7011 (not a
toll-free number); concerning comments
or a request for a public hearing,
Oluwafunmilayo Taylor at (202) 317–
6901 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Paperwork Reduction Act
The collection of information
contained in this notice of proposed
rulemaking will be submitted to the
Office of Management and Budget in
accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)). Comments on the collection of
information should be sent to the Office
of Management and Budget, Attn: Desk
Officer for the Department of the
Treasury, Office of Information and
Regulatory Affairs, Washington, DC
20503, with copies to the Internal
Revenue Service, Attn: IRS Reports
Clearance Officer,
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Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Proposed Rules
SE:W:CAR:MP:T:T:SP, Washington, DC
20224. Comments on the collection of
information should be received by
November 16, 2015. Comments are
specifically requested concerning:
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the IRS,
including whether the information will
have practical utility;
How the quality, utility, and clarity of
the information to be collected may be
enhanced;
How the burden of complying with
the proposed collection of information
may be minimized, including the
application of automated collection
techniques or other forms of information
technology; and
Estimates of capital or start-up costs
and costs of operation, maintenance,
and purchase of services to provide
information.
The collection of information in these
proposed regulations is in § 1.170A–
13(f)(18) of the Income Tax Regulations.
The collection of information is
necessary to properly substantiate
charitable contribution deductions
under the exception to the general
requirements for substantiating
charitable contribution deductions of
$250 or more. The collection of
information is required to comply with
the provisions of section 170(f)(8)(D) of
the Internal Revenue Code (Code). The
respondents are entities that receive
charitable contributions and donors to
such entities. The burden for the
collection of information contained in
proposed regulation § 1.170A–13(f)(18)
will be reflected in the burden estimate
for a form that the IRS intends to create
to request the information specified in
the proposed regulation. Once a draft
form is available, comments will be
invited via a notice in the Federal
Register and on the IRS Web site.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number assigned by the Office of
Management and Budget.
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Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under Code section 170(f)(8)
governing the substantiation of
charitable contributions of $250 or
more. Section 170(f)(8) was enacted by
Section 13172(a) of the Omnibus Budget
Reconciliation Act of 1993, Public Law
103–66 (107 Stat. 312, 455 (1993)),
effective for contributions made on or
after January 1, 1994. Section 1.170A–
13(f) provides rules on substantiation of
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charitable contributions of $250 or
more. See TD 8690 (1997–1 CB 68).
Section 170(f)(8)(A) requires a
taxpayer who claims a charitable
contribution deduction for any
contribution of $250 or more to obtain
substantiation in the form of a
contemporaneous written
acknowledgment (CWA) from the donee
organization. Under section 170(f)(8)(B),
while the CWA need not be in any
particular form, it must contain the
following information: (1) The amount
of cash and a description of any
property other than cash contributed; (2)
whether any goods and services were
provided by the donee organization in
consideration for the contribution; and
(3) a description and good faith estimate
of the value of any goods and services
provided by the donee organization or a
statement that such goods and services
consist solely of intangible religious
benefits.
The CWA must also be
contemporaneous. Under sections
170(f)(8)(C) and 1.170A–13(f)(3), a CWA
is contemporaneous if it is obtained by
the taxpayer on or before the earlier of
the date the taxpayer files an original
return for the taxable year in which the
contribution was made or the due date
(including extensions) for filing the
taxpayer’s original return for that year.
In the preamble to TD 8690, the
Treasury Department and the IRS
further emphasized this requirement,
noting that ‘‘[a] written
acknowledgment obtained after a
taxpayer files the original return for the
year of the contribution is not
contemporaneous within the meaning of
the statute.’’ TD 8690 (1997–1 CB 68).
Section 170(f)(8)(D) provides an
exception to the CWA requirement.
Under the exception, a CWA is not
required if the donee organization files
a return, on such form and in
accordance with such regulations as the
Secretary may prescribe, that includes
the information described in section
170(f)(8)(B). When issuing TD 8690 in
1997, the Treasury Department and the
IRS specifically declined to issue
regulations under section 170(f)(8)(D) to
effectuate donee reporting. The present
CWA system works effectively, with
minimal burden on donors and donees,
and the Treasury Department and the
IRS have received few requests since the
issuance of TD 8690 to implement a
donee reporting system.
In recent years, some taxpayers under
examination for their claimed charitable
contribution deductions have argued
that a failure to comply with the CWA
requirements of section 170(f)(8)(A) may
be cured if the donee organization files
an amended Form 990, ‘‘Return of
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55803
Organization Exempt From Income
Tax,’’ that includes the information
described in section 170(f)(8)(B) for the
contribution at issue. These taxpayers
argue that an amended Form 990
constitutes permissible donee reporting
within the meaning of section
170(f)(8)(D), even if the amended Form
990 is submitted to the IRS many years
after the purported charitable
contribution was made. The IRS has
consistently maintained that the section
170(f)(8)(D) exception is not available
unless and until the Treasury
Department and the IRS issue final
regulations prescribing the method by
which donee reporting may be
accomplished. Moreover, the Treasury
Department and the IRS have concluded
that the Form 990 is unsuitable for
donee reporting.
Explanation of Provisions
The framework established by these
proposed regulations for donee
reporting under the section 170(f)(8)(D)
exception is intended to provide for
timely reporting, while also minimizing
reporting burdens on donees and
protecting donor privacy.
Manner of Donee Reporting
The present CWA process requires
that the acknowledgement provided to
the donor contain information useful in
preparing the donor’s tax return for the
year of the contribution. To effectively
substitute for the CWA, any donee
reporting process would require not
only that an information return be filed
with the IRS, but also that a copy be
provided to the donor for use in
preparing the donor’s federal income tax
return for the year of the contribution.
In order to better protect donor
privacy, the Treasury Department and
the IRS have concluded that the Form
990 series should not be used for donee
reporting. Instead, before finalization of
these proposed regulations, the IRS
intends to develop a specific-use
information return for donee reporting.
Donees are not required to adopt donee
reporting. Donees who opt to use donee
reporting will be required to provide a
copy of the information return to the
donor at the address the donor provides
for this purpose, and the information
return will contain only the information
related to that donor. The proposed
regulations are reserved on the
particular form that will be prescribed
for this purpose.
Section 170(f)(8)(D) provides that a
donee organization must include the
information described in section
170(f)(8)(B) on its return for the donor
to qualify for the donee reporting
exception. Accordingly, the proposed
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regulations require that donees who opt
to use donee reporting must report that
information as well as the donor’s name,
address, and taxpayer identification
number. The donor’s taxpayer
identification number is necessary in
order to properly associate the donation
information with the correct donor.
Unlike a CWA, which is not sent to the
IRS, the donee reporting information
return will be sent to the IRS, which
must have a means to store, maintain,
and readily retrieve the return
information for a specific taxpayer if
and when substantiation is required in
the course of an examination. The
Treasury Department and the IRS
request comments on the scope of the
information necessary to verify
substantiation of charitable contribution
deductions under donee reporting.
The Treasury Department and the IRS
are concerned about the potential risk
for identity theft involved with donee
reporting given that donees will be
collecting donors’ taxpayer
identification numbers and maintaining
those numbers for some period of time.
The Treasury Department and the IRS
request comments on whether
additional guidance is necessary
regarding the procedures a donee
should use in soliciting and maintaining
a donor’s taxpayer identification
number and address to mitigate the risk.
In order to minimize the burden on
donees, the proposed regulations
provide that donee reporting is not
required, but may be done at the option
of a donee organization. If a
contribution is not reported using donee
reporting, then the donor must obtain a
CWA. The Treasury Department and the
IRS request comments on these
provisions and whether additional
guidance is necessary to clarify the
requirements for donors and donees if
the donee chooses to use donee
reporting for some or all of the
contributions it receives. Also, because
of the potential burden on donee
organizations, the Treasury Department
and the IRS request comments on how
the donee reporting process might be
better designed to minimize donee
burden, and how it may interact with
the requirement under section 6115 to
provide donors information regarding
quid pro quo contributions.
Time of Donee Reporting
Section 170(f)(8) is premised on
donors receiving timely substantiation
of their donations of $250 or more. The
CWA assists a donor preparing a return
(as well as the IRS examining the return)
in determining whether, and in what
amount, a donor may claim a charitable
contribution deduction. H.R. Rept. No.
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103–111, at 783, 785 (1993), 1993–3 CB
167, 359, 361; Viralam v. Commissioner,
136 T.C. 151, 171 (2011); Addis v.
Commissioner, 118 T.C. 528, 536 (2002),
aff’d, 374 F.3d 881 (9th Cir. 2004);
DiDonato v. Commissioner, T.C. Memo.
2011–153. It would be inconsistent with
the purpose of section 170(f)(8) to allow
an exception to the CWA requirement of
section 170(f)(8)(A) based on
information that might be reported by a
donee on a return that is filed many
years after the purported charitable
contribution was made. Rather, any
alternative method to using a CWA for
substantiating charitable contributions
through donee reporting must provide
timely information to both the IRS and
the donor in order to satisfy the purpose
of section 170(f)(8).
Accordingly, the proposed regulations
provide that any information return
under section 170(f)(8)(D) must be filed
by the donee no later than February
28th of the year following the year in
which the contribution is made, and the
donee organization must provide a copy
of the information return to the donor
by the same date. An information return
that is not filed timely with the IRS,
with a copy provided to the donor, will
not qualify under section 170(f)(8)(D).
February 28th is the date when
numerous other information returns
concerning transactions with other
persons must be filed. See, for example,
§ 1.6041–6 (information at source),
§ 1.6045–1(j) (returns of brokers), and
§ 1.6049–4(g) (returns regarding
payment of interest). The requirement
that a donee organization provide a
copy of the information return to the
donor no later than February 28th of the
year following the year in which the
contribution is made is intended to
provide donors with timely information
needed to claim appropriate charitable
contribution deductions on their
returns, as well as to ensure sound tax
administration—objectives that will not
be met if donee reporting is allowed to
occur long after the contribution was
made. In addition, for donors to be
relieved of the obligation to obtain a
CWA, the donee must file the donee
reporting information return, and
communicate that it has done so to the
donor, before the due date for the
donor’s return. The Treasury
Department and the IRS request
comments on the use of February 28th
as the due date for filing a return and
furnishing a copy to a donor.
Proposed Effective Date
The regulations are proposed to apply
to contributions made on or after the
date of publication of a Treasury
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decision adopting these rules as final
regulations in the Federal Register.
Special Analyses
Certain IRS regulations, including this
one, are exempt from the requirements
of Executive Order 12866, as
supplemented and reaffirmed by
Executive Order 13563. Therefore, a
regulatory impact assessment is not
required. It has also been determined
that section 553(b) of the Administrative
Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations.
It is hereby certified that these
regulations will not have a significant
economic impact on a substantial
number of small entities. This
certification is based on the fact that, to
the extent a donee reporting system is
implemented under section 170(f)(8)(D),
the statute itself specifies the bulk of the
information that needs to be collected
for purposes of these regulations. The
proposed regulations require that, in
order for a donor to be relieved of the
current CWA requirement, a donee
organization that uses donee reporting
must file a return with the IRS reporting
certain information and must furnish a
copy of the return to the donor whose
contribution is reported on such return.
These regulations provide the content of
the return under section 170(f)(8)(D), the
time for filing the return, and the
requirement to furnish a copy to the
donor. Moreover, any burden associated
with the collection of information under
the proposed regulations is minimized
by the fact that donee reporting under
the proposed regulations is optional on
the part of any donee, including small
entities. Donees need not use this donee
reporting process and donors can
continue to use the current CWA
process. Given the effectiveness and
minimal burden of the CWA process, it
is expected that donee reporting will be
used in an extremely low percentage of
cases.
Based on these facts, a Regulatory
Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) is not required.
Pursuant to section 7805(f) of the
Code, this notice of proposed
rulemaking will be submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
written comments that are submitted
timely to the IRS as prescribed in this
preamble under the ‘‘Addresses’’
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Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Proposed Rules
heading. The Treasury Department and
the IRS request comments on all aspects
of the proposed rules. All comments
will be available at https://
www.regulations.gov or upon request.
A public hearing will be scheduled if
requested in writing by any person who
timely submits comments. If a public
hearing is scheduled, notice of the date,
time, and place for the public hearing
will be published in the Federal
Register.
Drafting Information
The principal authors of these
regulations are Martin L. Osborne and
Robert Basso of the Office of the
Associate Chief Counsel (Income Tax
and Accounting). However, other
personnel from the Treasury
Department and the IRS participated in
their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Proposed Amendment to the
Regulations
Accordingly, 26 CFR part 1 is
proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 170A–13 is amended
by revising paragraph (f)(18) and adding
paragraph (f)(19) to read as follows:
■
§ 1.170A–13. Recordkeeping and return
requirements for deductions for charitable
contributions.
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*
*
*
*
*
(f) * * *
(18) Donee organization reporting—(i)
Prescribed form. [Reserved]
(ii) Content of return. A document
will not qualify as a return for purposes
of section 170(f)(8)(D) unless it contains
all of the following information:
(A) The name and address of the
donee;
(B) The name and address of the
donor;
(C) The taxpayer identification
number of the donor;
(D) The amount of cash and a
description (but not necessarily the
value) of any property other than cash
contributed by the donor to the donee;
(E) Whether any goods and services
were provided by the donee
organization in consideration, in whole
or in part, for the contribution by the
donor; and
(F) A description and good faith
estimate of the value of any goods and
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services provided by the donee
organization or a statement that such
goods and services consist solely of
intangible religious benefits.
(iii) Time for filing return. Every
donee organization filing a return
described in section 170(f)(8)(D) shall
file such return on or before February 28
of the year following the calendar year
in which the contribution was made. If
the return is not filed timely, the return
does not qualify under section
170(f)(8)(D), and section 170(f)(8)(A)
through (C) applies to the contribution.
(iv) Furnishing a copy to donor. Every
donee organization filing a return
described in section 170(f)(8)(D) shall
furnish a copy of the return to the donor
whose contribution is reported on such
return on or before February 28 of the
year following the calendar year in
which the contribution was made. The
copy of the return shall be provided to
the donor at the address the donor
provides for this purpose.
(v) Donee organization reporting at
option of donee. Donee organization
reporting is not required. Donee
reporting is available solely at the
option of a donee organization, and, the
requirements of section 170(f)(8)(A)
through (C) apply to all contributions
that are not reported using donee
reporting.
(19) Effective/applicability date.
Paragraphs (f)(1) through (17) of this
section apply to contributions made on
or after December 16, 1996. However,
taxpayers may rely on the rules of
paragraphs (f)(1) through (17) for
contributions made on or after January
1, 1994. Paragraph (f)(18) of this section
applies to contributions made on or
after the date of publication of a
Treasury decision adopting these rules
as final regulations in the Federal
Register.
John Dalrymple,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. 2015–23291 Filed 9–16–15; 8:45 am]
BILLING CODE 4830–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R09–OAR–2015–0316; FRL–9933–82–
Region 9]
Approval and Promulgation of State
Implementation Plans; Nevada;
Regional Haze Progress Report
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
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55805
The United States
Environmental Protection Agency (EPA)
proposes to approve a revision to the
Nevada Regional Haze State
Implementation Plan (SIP) submitted by
the Nevada Division of Environmental
Protection (NDEP) to document that the
existing plan is adequate to achieve
established goals for visibility
improvement and emissions reductions
by 2018. The Nevada Regional Haze SIP
revision addresses the Regional Haze
Rule (RHR) requirements under the
Clean Air Act (CAA) to submit a report
describing progress in achieving
reasonable progress goals (RPGs) to
improve visibility in federally
designated Class I areas in Nevada and
in nearby states that may be affected by
emissions from sources in Nevada. EPA
is proposing to approve Nevada’s
determination that the existing Nevada
Regional Haze Implementation Plan is
adequate to meet the visibility goals,
and requires no substantive revision at
this time.
DATES: Comments must be received by
the designated contact at the address
listed below on or before October 19,
2015.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R09–
OAR–2015–0316, to the Federal
eRulemaking Portal: https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or withdrawn. EPA may publish
any comment received to its public
docket. Do not submit electronically any
information you consider to be
Confidential Business Information (CBI)
or other information whose disclosure is
restricted by statute. If you need to
include CBI as part of your comment,
please visit https://www.epa.gov/
dockets/comments.html for instructions.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make.
For additional submission methods,
the full EPA public comment policy,
and general guidance on making
effective comments, please visit https://
www.epa.gov/dockets/comments.html.
The index to the docket (docket
number EPA–R09–OAR–2015–0316) for
this proposed rule is available
electronically at https://
www.regulations.gov. Although listed in
the index, some information is not
publicly available, such as CBI or other
information that is restricted by statute.
Certain other material, such as
copyrighted material, is publicly
SUMMARY:
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]]>Agencies
[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Proposed Rules]
[Pages 55802-55805]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23291]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-138344-13]
RIN 1545-BL94
Substantiation Requirement for Certain Contributions
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document contains proposed regulations to implement the
exception to the ``contemporaneous written acknowledgement''
requirement for substantiating charitable contribution deductions of
$250 or more. These proposed regulations provide rules concerning the
time and manner for donee organizations to file information returns
that report the required information about contributions (donee
reporting).
DATES: Written or electronic comments must be received by December 16,
2015.
ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-138344-13), Room 5203,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand-delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-138344-
13), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue
NW., Washington, DC, or sent electronically via the Federal eRulemaking
Portal at www.regulations.gov (IRS REG-138344-13).
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Robert Basso at (202) 317-7011 (not a toll-free number); concerning
comments or a request for a public hearing, Oluwafunmilayo Taylor at
(202) 317-6901 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking will be submitted to the Office of Management and Budget in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)). Comments on the collection of information should be sent to
the Office of Management and Budget, Attn: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503, with copies to the Internal Revenue
Service, Attn: IRS Reports Clearance Officer,
[[Page 55803]]
SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of
information should be received by November 16, 2015. Comments are
specifically requested concerning:
Whether the proposed collection of information is necessary for the
proper performance of the functions of the IRS, including whether the
information will have practical utility;
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the proposed collection of
information may be minimized, including the application of automated
collection techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
The collection of information in these proposed regulations is in
Sec. 1.170A-13(f)(18) of the Income Tax Regulations. The collection of
information is necessary to properly substantiate charitable
contribution deductions under the exception to the general requirements
for substantiating charitable contribution deductions of $250 or more.
The collection of information is required to comply with the provisions
of section 170(f)(8)(D) of the Internal Revenue Code (Code). The
respondents are entities that receive charitable contributions and
donors to such entities. The burden for the collection of information
contained in proposed regulation Sec. 1.170A-13(f)(18) will be
reflected in the burden estimate for a form that the IRS intends to
create to request the information specified in the proposed regulation.
Once a draft form is available, comments will be invited via a notice
in the Federal Register and on the IRS Web site.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by the Office of Management and Budget.
Background
This document contains amendments to the Income Tax Regulations (26
CFR part 1) under Code section 170(f)(8) governing the substantiation
of charitable contributions of $250 or more. Section 170(f)(8) was
enacted by Section 13172(a) of the Omnibus Budget Reconciliation Act of
1993, Public Law 103-66 (107 Stat. 312, 455 (1993)), effective for
contributions made on or after January 1, 1994. Section 1.170A-13(f)
provides rules on substantiation of charitable contributions of $250 or
more. See TD 8690 (1997-1 CB 68).
Section 170(f)(8)(A) requires a taxpayer who claims a charitable
contribution deduction for any contribution of $250 or more to obtain
substantiation in the form of a contemporaneous written acknowledgment
(CWA) from the donee organization. Under section 170(f)(8)(B), while
the CWA need not be in any particular form, it must contain the
following information: (1) The amount of cash and a description of any
property other than cash contributed; (2) whether any goods and
services were provided by the donee organization in consideration for
the contribution; and (3) a description and good faith estimate of the
value of any goods and services provided by the donee organization or a
statement that such goods and services consist solely of intangible
religious benefits.
The CWA must also be contemporaneous. Under sections 170(f)(8)(C)
and 1.170A-13(f)(3), a CWA is contemporaneous if it is obtained by the
taxpayer on or before the earlier of the date the taxpayer files an
original return for the taxable year in which the contribution was made
or the due date (including extensions) for filing the taxpayer's
original return for that year. In the preamble to TD 8690, the Treasury
Department and the IRS further emphasized this requirement, noting that
``[a] written acknowledgment obtained after a taxpayer files the
original return for the year of the contribution is not contemporaneous
within the meaning of the statute.'' TD 8690 (1997-1 CB 68).
Section 170(f)(8)(D) provides an exception to the CWA requirement.
Under the exception, a CWA is not required if the donee organization
files a return, on such form and in accordance with such regulations as
the Secretary may prescribe, that includes the information described in
section 170(f)(8)(B). When issuing TD 8690 in 1997, the Treasury
Department and the IRS specifically declined to issue regulations under
section 170(f)(8)(D) to effectuate donee reporting. The present CWA
system works effectively, with minimal burden on donors and donees, and
the Treasury Department and the IRS have received few requests since
the issuance of TD 8690 to implement a donee reporting system.
In recent years, some taxpayers under examination for their claimed
charitable contribution deductions have argued that a failure to comply
with the CWA requirements of section 170(f)(8)(A) may be cured if the
donee organization files an amended Form 990, ``Return of Organization
Exempt From Income Tax,'' that includes the information described in
section 170(f)(8)(B) for the contribution at issue. These taxpayers
argue that an amended Form 990 constitutes permissible donee reporting
within the meaning of section 170(f)(8)(D), even if the amended Form
990 is submitted to the IRS many years after the purported charitable
contribution was made. The IRS has consistently maintained that the
section 170(f)(8)(D) exception is not available unless and until the
Treasury Department and the IRS issue final regulations prescribing the
method by which donee reporting may be accomplished. Moreover, the
Treasury Department and the IRS have concluded that the Form 990 is
unsuitable for donee reporting.
Explanation of Provisions
The framework established by these proposed regulations for donee
reporting under the section 170(f)(8)(D) exception is intended to
provide for timely reporting, while also minimizing reporting burdens
on donees and protecting donor privacy.
Manner of Donee Reporting
The present CWA process requires that the acknowledgement provided
to the donor contain information useful in preparing the donor's tax
return for the year of the contribution. To effectively substitute for
the CWA, any donee reporting process would require not only that an
information return be filed with the IRS, but also that a copy be
provided to the donor for use in preparing the donor's federal income
tax return for the year of the contribution.
In order to better protect donor privacy, the Treasury Department
and the IRS have concluded that the Form 990 series should not be used
for donee reporting. Instead, before finalization of these proposed
regulations, the IRS intends to develop a specific-use information
return for donee reporting. Donees are not required to adopt donee
reporting. Donees who opt to use donee reporting will be required to
provide a copy of the information return to the donor at the address
the donor provides for this purpose, and the information return will
contain only the information related to that donor. The proposed
regulations are reserved on the particular form that will be prescribed
for this purpose.
Section 170(f)(8)(D) provides that a donee organization must
include the information described in section 170(f)(8)(B) on its return
for the donor to qualify for the donee reporting exception.
Accordingly, the proposed
[[Page 55804]]
regulations require that donees who opt to use donee reporting must
report that information as well as the donor's name, address, and
taxpayer identification number. The donor's taxpayer identification
number is necessary in order to properly associate the donation
information with the correct donor. Unlike a CWA, which is not sent to
the IRS, the donee reporting information return will be sent to the
IRS, which must have a means to store, maintain, and readily retrieve
the return information for a specific taxpayer if and when
substantiation is required in the course of an examination. The
Treasury Department and the IRS request comments on the scope of the
information necessary to verify substantiation of charitable
contribution deductions under donee reporting.
The Treasury Department and the IRS are concerned about the
potential risk for identity theft involved with donee reporting given
that donees will be collecting donors' taxpayer identification numbers
and maintaining those numbers for some period of time. The Treasury
Department and the IRS request comments on whether additional guidance
is necessary regarding the procedures a donee should use in soliciting
and maintaining a donor's taxpayer identification number and address to
mitigate the risk.
In order to minimize the burden on donees, the proposed regulations
provide that donee reporting is not required, but may be done at the
option of a donee organization. If a contribution is not reported using
donee reporting, then the donor must obtain a CWA. The Treasury
Department and the IRS request comments on these provisions and whether
additional guidance is necessary to clarify the requirements for donors
and donees if the donee chooses to use donee reporting for some or all
of the contributions it receives. Also, because of the potential burden
on donee organizations, the Treasury Department and the IRS request
comments on how the donee reporting process might be better designed to
minimize donee burden, and how it may interact with the requirement
under section 6115 to provide donors information regarding quid pro quo
contributions.
Time of Donee Reporting
Section 170(f)(8) is premised on donors receiving timely
substantiation of their donations of $250 or more. The CWA assists a
donor preparing a return (as well as the IRS examining the return) in
determining whether, and in what amount, a donor may claim a charitable
contribution deduction. H.R. Rept. No. 103-111, at 783, 785 (1993),
1993-3 CB 167, 359, 361; Viralam v. Commissioner, 136 T.C. 151, 171
(2011); Addis v. Commissioner, 118 T.C. 528, 536 (2002), aff'd, 374
F.3d 881 (9th Cir. 2004); DiDonato v. Commissioner, T.C. Memo. 2011-
153. It would be inconsistent with the purpose of section 170(f)(8) to
allow an exception to the CWA requirement of section 170(f)(8)(A) based
on information that might be reported by a donee on a return that is
filed many years after the purported charitable contribution was made.
Rather, any alternative method to using a CWA for substantiating
charitable contributions through donee reporting must provide timely
information to both the IRS and the donor in order to satisfy the
purpose of section 170(f)(8).
Accordingly, the proposed regulations provide that any information
return under section 170(f)(8)(D) must be filed by the donee no later
than February 28th of the year following the year in which the
contribution is made, and the donee organization must provide a copy of
the information return to the donor by the same date. An information
return that is not filed timely with the IRS, with a copy provided to
the donor, will not qualify under section 170(f)(8)(D).
February 28th is the date when numerous other information returns
concerning transactions with other persons must be filed. See, for
example, Sec. 1.6041-6 (information at source), Sec. 1.6045-1(j)
(returns of brokers), and Sec. 1.6049-4(g) (returns regarding payment
of interest). The requirement that a donee organization provide a copy
of the information return to the donor no later than February 28th of
the year following the year in which the contribution is made is
intended to provide donors with timely information needed to claim
appropriate charitable contribution deductions on their returns, as
well as to ensure sound tax administration--objectives that will not be
met if donee reporting is allowed to occur long after the contribution
was made. In addition, for donors to be relieved of the obligation to
obtain a CWA, the donee must file the donee reporting information
return, and communicate that it has done so to the donor, before the
due date for the donor's return. The Treasury Department and the IRS
request comments on the use of February 28th as the due date for filing
a return and furnishing a copy to a donor.
Proposed Effective Date
The regulations are proposed to apply to contributions made on or
after the date of publication of a Treasury decision adopting these
rules as final regulations in the Federal Register.
Special Analyses
Certain IRS regulations, including this one, are exempt from the
requirements of Executive Order 12866, as supplemented and reaffirmed
by Executive Order 13563. Therefore, a regulatory impact assessment is
not required. It has also been determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to
these regulations.
It is hereby certified that these regulations will not have a
significant economic impact on a substantial number of small entities.
This certification is based on the fact that, to the extent a donee
reporting system is implemented under section 170(f)(8)(D), the statute
itself specifies the bulk of the information that needs to be collected
for purposes of these regulations. The proposed regulations require
that, in order for a donor to be relieved of the current CWA
requirement, a donee organization that uses donee reporting must file a
return with the IRS reporting certain information and must furnish a
copy of the return to the donor whose contribution is reported on such
return. These regulations provide the content of the return under
section 170(f)(8)(D), the time for filing the return, and the
requirement to furnish a copy to the donor. Moreover, any burden
associated with the collection of information under the proposed
regulations is minimized by the fact that donee reporting under the
proposed regulations is optional on the part of any donee, including
small entities. Donees need not use this donee reporting process and
donors can continue to use the current CWA process. Given the
effectiveness and minimal burden of the CWA process, it is expected
that donee reporting will be used in an extremely low percentage of
cases.
Based on these facts, a Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required.
Pursuant to section 7805(f) of the Code, this notice of proposed
rulemaking will be submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on its impact on small
business.
Comments and Requests for a Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments that are submitted
timely to the IRS as prescribed in this preamble under the
``Addresses''
[[Page 55805]]
heading. The Treasury Department and the IRS request comments on all
aspects of the proposed rules. All comments will be available at https://www.regulations.gov or upon request.
A public hearing will be scheduled if requested in writing by any
person who timely submits comments. If a public hearing is scheduled,
notice of the date, time, and place for the public hearing will be
published in the Federal Register.
Drafting Information
The principal authors of these regulations are Martin L. Osborne
and Robert Basso of the Office of the Associate Chief Counsel (Income
Tax and Accounting). However, other personnel from the Treasury
Department and the IRS participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendment to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 170A-13 is amended by revising paragraph (f)(18) and
adding paragraph (f)(19) to read as follows:
Sec. 1.170A-13. Recordkeeping and return requirements for deductions
for charitable contributions.
* * * * *
(f) * * *
(18) Donee organization reporting--(i) Prescribed form. [Reserved]
(ii) Content of return. A document will not qualify as a return for
purposes of section 170(f)(8)(D) unless it contains all of the
following information:
(A) The name and address of the donee;
(B) The name and address of the donor;
(C) The taxpayer identification number of the donor;
(D) The amount of cash and a description (but not necessarily the
value) of any property other than cash contributed by the donor to the
donee;
(E) Whether any goods and services were provided by the donee
organization in consideration, in whole or in part, for the
contribution by the donor; and
(F) A description and good faith estimate of the value of any goods
and services provided by the donee organization or a statement that
such goods and services consist solely of intangible religious
benefits.
(iii) Time for filing return. Every donee organization filing a
return described in section 170(f)(8)(D) shall file such return on or
before February 28 of the year following the calendar year in which the
contribution was made. If the return is not filed timely, the return
does not qualify under section 170(f)(8)(D), and section 170(f)(8)(A)
through (C) applies to the contribution.
(iv) Furnishing a copy to donor. Every donee organization filing a
return described in section 170(f)(8)(D) shall furnish a copy of the
return to the donor whose contribution is reported on such return on or
before February 28 of the year following the calendar year in which the
contribution was made. The copy of the return shall be provided to the
donor at the address the donor provides for this purpose.
(v) Donee organization reporting at option of donee. Donee
organization reporting is not required. Donee reporting is available
solely at the option of a donee organization, and, the requirements of
section 170(f)(8)(A) through (C) apply to all contributions that are
not reported using donee reporting.
(19) Effective/applicability date. Paragraphs (f)(1) through (17)
of this section apply to contributions made on or after December 16,
1996. However, taxpayers may rely on the rules of paragraphs (f)(1)
through (17) for contributions made on or after January 1, 1994.
Paragraph (f)(18) of this section applies to contributions made on or
after the date of publication of a Treasury decision adopting these
rules as final regulations in the Federal Register.
John Dalrymple,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2015-23291 Filed 9-16-15; 8:45 am]
BILLING CODE 4830-01-P
