Strict Documentation Requirements for Charitable Deductions

The US Tax Court recently issued a decision that emphasizes how important it is to comply with all of the seemingly nit-picky requirements for charitable deductions.  Martha L. Albrecht, the donor in this case, made donation of some items of property to the Wheelwright Museum of the American Indian in 2014.  The Museum provided Ms. Albrecht with a Deed of Gift, which outlined various details about the donation, including the fair market value of the donated items and the fact that the donation was irrevocable.  Ms. Albrecht proceeded to take a charitable deduction of $464,000, carried over a few years, for this donation.  Unfortunately, in Martha L. Albrecht v. Commissioner, T.C. Memo 2022-53, in May of this year, the Judge determined that because the documentation from the Museum failed to state whether Ms. Albrecht received goods or services in return for her donation, she lost the entire deduction.

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