As a general rule, the fair market value of property contributed to charity is deductible in determining taxable income. However, deduction is contingent on the donor’s substantiating the fact and value of the property contributed in accordance with statutory and regulatory rules. Essentially, a contribution valued at $250 or more must be substantiated with an acknowledgment from the donee organization which must include a description of the property contributed (but not its value), a statement whether the donee provided any goods or services in exchange for the contribution and, if goods or services were provided, a good faith estimate of their value. Also, any used clothing or household items must be in good used condition or better in order for a deduction to be allowed.
Some charitable organizations have adopted procedures under which the organization gives the donor a blank receipt which does not identify the items or condition of the donated property (in some cases, the receipt may give a general description such as “1 bag used clothing”). A recent Tax Court case found such a receipt inadequate to satisfy the acknowledgment requirement.
In 2009, Mr. S. made contributions of used property to the American Veterans National Service Foundation (AMVETS). The contributions consisted of household furnishings (six sofas, four televisions, five bedroom sets, six mattresses, a kitchen set, a dining room set, a china cabinet and three rugs) from his deceased mother’s house, used clothing (180 shirts, 63 pairs of slacks, 153 pairs of jeans, 173 pairs of shoes, 51 dresses, 35 sweaters, nine overcoats, and seven suits) belonging to him and his children and electronics equipment (two computer systems, a printer and a copier). Prior to making the contributions, Mr. S. had visited AMVETS on a number of occasions and had received a number of blank “tax receipts” signed by AMVETS representatives. Mr. S. subsequently consolidated his contributions on two of these receipts, identifying himself as the donor, inserting a date and indicating a total value of $27,767 on each of the receipts. One of the receipts contained a breakdown of the contribution as $14,487 for “clothing” and $13,280 for “non-clothing.”
As evidence of the identity and value of the items contributed, Mr. S. produced a spreadsheet, prepared by him but not given to AMVETS or attached to the receipt. Although at trial Mr. S. introduced a “Donation Value Guide” which he had obtained from the Salvation Army website to substantiate the value of his contribution, the court noted that many of the items that he contributed were valued considerably higher than the “high” values in the Salvation Army guide. Mr. S. did not provide photographs of the contributed items and produced no evidence as to their condition.
The Tax Court, while expressing “no doubt” that Mr. S. did contribute property to AMVETS, found that he had not satisfied the substantiation requirement. Accordingly, the court disallowed the entire deduction.
Although the facts of this case are extreme, the principle could be used by IRS to disallow property contributions — at least were the amount claimed exceeds $250 — to any charity that provides the donor with a blank receipt, leaving the donor to fill in the details. It has been the author’s experience that a number of large organizations, including, in addition to AMVETS, the Vietnam Veterans of America in its curbside pickups and Goodwill Industries, as well as smaller organizations, use blank receipts. If possible, donors to such organizations may want to accompany the contribution with a listing of the items contributed stating that they are in good or better condition and asking a representative of the charity to initial the listing and attach it to the blank receipt. In some cases, it might make sense for the donor to photograph the items to demonstrate their condition.
 Because of the amount claimed, Mr. S’s deduction was also subject to additional substantiation requirements which are not discussed here. Although the Tax Court discussed those requirements, it held Mr. S’ failure to substantiate as discussed in this article “fatal” to his claim.
 IRS had previously allowed Mr. S. a small deduction for property contributions, which the court did not alter.