The Tax Law of Charitable Giving, 6th Edition

CHAPTER TWENTYDisclosure Law

• § 20.1 Disclosure by Charitable Organizations in General
• § 20.2 Quid Pro Quo Contribution Law
• § 20.3 Disclosure by Noncharitable Organizations

There is a substantial body of federal tax law that imposes on charitable and certain other tax-exempt organizations the obligation to make various disclosures to donors in the context of giving to these organizations. This area of the law differentiates between charitable and noncharitable tax-exempt organizations.

§ 20.1 DISCLOSURE BY CHARITABLE ORGANIZATIONS IN GENERAL

A tax-exempt charitable organization was not, until 1994, required by statute to state explicitly, in its solicitations for support from the public, whether an amount paid to it was deductible as a charitable contribution, or whether all or part of the payment constituted consideration for goods or services furnished by the organization to the payor.¹

It has long been the view of the IRS, however, that if any payment or portion of a payment to a charitable organization is not deductible as a charitable gift, the recipient charitable organization should so notify the payor.² That is, it has generally been the IRS's position that it is the responsibility of charitable organizations to inform their patrons of the distinction between deductible and nondeductible payments. The latter includes true dues, payments for admissions or merchandise, and other material benefits and privileges received in return for the payment. The IRS has expected ...