The Tax Court has disallowed a married couple’s cash charitable contribution deduction to their church.

David and Veronda Durden made charitable contributions totaling more than $25,000. The Durdens had canceled checks supporting their deduction, and most of the checks were for amounts in excess of $250.

When examined by the IRS, the Durdens produced the canceled checks and a letter from their church acknowledging over $22,500 of contributions. The IRS disallowed the deduction because the acknowledgment letter from the church did not state whether any goods or services were provided to the Durdens in consideration for their contributions.

In response, the Durdens obtained a second letter from the church that contained the necessary language about goods or services. The IRS refused to accept the second letter because it was not issued prior to the due date of the Durdens’ tax return on which the contribution deduction was claimed.

The Tax Court concluded that the Durdens had failed to comply with the clear substantiation requirements of the Internal Revenue Code. The court disallowed their deduction for the charitable contributions (David P. Durden et. ux. v. Commissioner, T.C. Memo 2012-140, May 17, 2012).

This case illustrates the need to be vigilant about receiving proper and timely acknowledgment from charities for contributions of $250 or more. A canceled check is not enough to substantiate the deduction. And a failure to receive the proper acknowledgment from the charity can be remedied within only a relatively short period of time.