On January 7, the IRS withdrew proposed regulations that would have provided for an optional donor reporting process that could be used by charitable organizations instead of individual donor substantiation letters. Charitable nonprofits would have had the option to collect and provide to the IRS the name, address, and Social Security numbers of their donors to
serve as evidence of contributions for tax purposes.
Since its issuance, the proposed rule has been strongly opposed by charitable nonprofits across the United States. Yeo & Yeo was one of many accounting firms that submitted a response to the IRS on behalf of its clients, pointing out potential unintended consequences, including security risks of charitable organizations maintaining tax reporting information on donors and potential reductions in donations as a result.
Contact your Yeo & Yeo professional for more information.