Since the phrase “the taxpayer received no goods or services from the charitable organization” is standard on most charitable donation receipts for most organizations, it is sometimes easy to leave off when doing a receipt in special situations, many times involving noncash gifts.  It is very important that all nonprofit organizations make sure this statement is on all receipts/letters where this is truly the case.

The IRS is repeatedly and often referring to a tax court case (Durden v. Comr. T.C. Memo 2012-140) in which charitable contributions were disallowed even though the organization (in this case, a church) provided its contributors with a receipt for contributions. The receipt that the organization provided its contributors did not state that “the taxpayer received no goods or services from the charitable organization” (In this case, the taxpayer did not receive any goods or services.).  The deduction was disallowed!

For charitable organizations, this statement needs to be added to the receipts/contribution statements that you provide to contributors for charitable contributions if it is not already stated on the receipts. Be certain that this receipt is provided before the contributor files his or her tax return. They will need this receipt before the return is filed.