Tax Court: Charitable contribution | KPMG | US
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Tax Court: “Contemporaneous written acknowledgment” for charitable contribution

“Contemporaneous written acknowledgment”

The U.S. Tax Court today—in a “reviewed opinion”—denied the taxpayer’s motion for summary judgment with respect to the rules for substantiation of a charitable contribution by means of a “contemporaneous written acknowledgement” from the donee organization. The Tax Court majority looked to the statutory construction and found that the rulemaking authority under section 170(f)(8)(D) is not self-executing, absent regulations to which the statute refers, and that the general rule requiring such acknowledgement applies to the charitable donation in this case.


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The case is: 15 West 17th Street, LLC v. Commissioner, 147 T.C. No. 19 (December 22, 2016). Read the 68-page opinion [PDF 266 KB] that includes concurring and dissenting opinions.


The limited liability company (LLC) on its partnership return for 2007 claimed a charitable contribution deduction of approximately $64.5 million related to a conservation easement of a historic building in New York City. 

A provision of the Code—section 170(f)(8)(A)—requires a taxpayer must secure and maintain a “contemporaneous written acknowledgment” from the donee organization, and that this document must state, among other items, whether the donee provided the donor with any goods or services in exchange for the gift.

Section 170(f)(8)(D) provides that the substantiation requirements of section 170(f)(8)(A) do not apply to a contribution “…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 specified in subparagraph (B). To date, the Treasury Department has not issued regulations to implement the donee-reporting regime referred to in section 170(f)(8)(D).

The IRS audited the LLC’s return and disallowed the charitable contribution deduction. After the case was docketed in the Tax Court, the donee organization submitted an amended Form 990, Return of Organization Exempt from Income Tax, that included the information specified in section 170(f)(8)(B). The LLC filed a motion for partial summary judgment, contending that this action by the donee eliminated the need for a “contemporaneous written acknowledgement” to substantiate LLC’s gift.

The Tax Court majority denied the motion for summary judgment, holding that 

  • Section 170(f)(8)(D) sets forth a discretionary delegation of rulemaking authority, and is not self-executing in the absence of the regulations to which the statute refers. 
  • The general rule under section 170(f)(8)(A), requiring a contemporaneous written acknowledgement meeting the requirements of section 170(f)(8)(B) applies to the contribution in this case.

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