## Facts

- David P. Durden and Veronda J. Durden claimed charitable contribution deductions of about $25,171 on their 2007 federal income tax return, primarily by checks to their church, a qualified § 170(c) organization.
- With limited exceptions, each individual contribution exceeded $250.
- The church provided a written acknowledgment dated January 10, 2008 listing total 2007 contributions (about $22,517), but it did not state whether any goods or services were provided in exchange for the contributions (or that only intangible religious benefits were provided).
- After the IRS disallowed the deduction, the church issued a second letter in June 2009 that included the missing “no goods or services were provided” statement.
- The taxpayers also had canceled checks and other church records substantiating payment amounts.
- The IRS issued a notice of deficiency disallowing the deduction for lack of substantiation under I.R.C. § 170(f)(8); the Tax Court resolved the case on the Commissioner’s motion for summary judgment.

## Issues

1. Whether the taxpayers satisfied I.R.C. § 170(f)(8) for contributions of $250 or more when the timely acknowledgment omitted the required goods-or-services statement and the corrected acknowledgment was issued after the return was due and filed.
2. Whether the taxpayers’ records and later corrected acknowledgment constituted substantial compliance sufficient to allow the deductions.

## Decision

- The Tax Court granted summary judgment for the Commissioner as to the disallowed cash/check contributions of $250 or more.
- The court held the January 2008 acknowledgment was statutorily defective because it lacked the required statement regarding goods or services.
- The court held the June 2009 letter could not cure the defect because it was not “contemporaneous” within the meaning of § 170(f)(8).
- The court rejected substantial compliance and sustained the disallowance despite the bona fide nature of the contributions and the donee’s qualified status.

## Legal Principles

- A charitable deduction for a contribution of $250 or more is allowed only if the taxpayer obtains a contemporaneous written acknowledgment from the donee organization.
- The acknowledgment must include the amount contributed and a statement whether the donee provided any goods or services in consideration (or, if applicable, that goods or services consisted solely of intangible religious benefits).
- An acknowledgment is contemporaneous only if obtained on or before the earlier of the date the return is filed or the due date (including extensions).
- Proof of payment (e.g., canceled checks) does not substitute for a compliant acknowledgment when § 170(f)(8) applies.
- Substantial compliance does not excuse failure to satisfy an express statutory substantiation element.

## Conclusion

The Tax Court denied the taxpayers’ charitable deductions for $250-or-more contributions because the timely donee acknowledgment omitted the required goods-or-services statement and the later corrective letter was not contemporaneous, making the statutory substantiation condition unsatisfied.


Durden v. Commissioner, T.C. Memo 2012-140 (T.C. 2012)