My wife just started volunteering with our county's department of recreation and parks as a tennis coach. Are mileage expenses associated with county government volunteering deductible? If so, I'm keeping a log of dates and miles. Each individual session is 28 miles roundtrip, which at 14 cents per mile, is $3.92. If the total number of sessions causes the mileage to exceed $250, is an acknowledgment letter from the county required, or only if any single session expense exceeds $250? There are no other expenses (fees, uniform, tolls, etc).
Also, if I already deduct less than $500 for donation of clothing and household items, and want to deduct the miles for this volunteering that combined with the donation of clothing and household items together exceeds $500, do I then need to complete Form 8283 for all household items and the volunteering miles?
When filing, do I need to / should I submit a copy of the mileage log?
, or only if any single session expense exceeds $250?
Yes, see page 8 in IRS Pub 1771.
No.
No. Keep it for substantiation should you be audited.
too broad a question but.... unless you have a vehicle with terrific gas mileage, the actual cost of gas and oil usually exceeds 14 cents per mile. You can also add parking and tolls to the mileage expense or the actual gas and oil expense.
You can compute your actual cost per charitable mile by using any reasonable method. E.g., you could use the published mpg rate for city driving for your vehicle and the actual cost of a gallon of gas; you could use the total annual cost of oil divided by annual miles to determine a cost by mile for the oil.
No. ========================I must disagree. The Tax Court held that for "out of pocket" expenses exceeding a total of $250 for the year (i.e. not individually) for a single charity, an acknowledgement is required. - TC Memo 2003-232 (one of my own cases).
I agree with Stussy, at least as per my own observations. I don't recall seeing a Tax Court case where the taxpayer successfully established that an acknowledgement letter was NOT required when the IRS raised this issue. On the other hand I've seen many, many cases where the taxpayer lost on this point flat out (Stussy's being one of them).
Back to the original questions, my understanding is that out-of-pocket volunteer expenses are deemed to be "cash" contributions, and not "inkind" contributions, and therefore there is no interaction with Form 8283.
(f) Substantiation of charitable contributions of $250 or more?(1) In general. No deduction is allowed under section 170(a) for all or part of any contribution of $250 or more unless the taxpayer substantiates the contribution with a contemporaneous written acknowledgment from the donee organization. A taxpayer who makes more than one contribution of $250 or more to a donee organization in a taxable year may substantiate the contributions with one or more contemporaneous written acknowledgments. Section 170(f)(8) does not apply to a payment of $250 or more if the amount contributed (as determined under §1.170A?1(h)) is less than $250. Separate contributions of less than $250 are not subject to the requirements of section 170(f)(8), regardless of whether the sum of the contributions made by a taxpayer to a donee organization during a taxable year equals $250 or more.
The last sentence says that you do not aggregate separate contributions of less than $250 even if the total reaches $250. This sentence is the reason why one does not need an acknowledgement from a church to whom you donate $10 every time you visit. The $10 is a separate gift. The mileage allowance is considered a cash gift. Every time one drives to a charity to volunteer is a separate contribution. I see no reason why one has to aggregate all of those separate contributions.
(f) Substantiation of charitable contributions of $250 or more?(1) In general. No deduction is allowed under section 170(a) for all or part of any contribution of $250 or more unless the taxpayer substantiates the contribution with a contemporaneous written acknowledgment from the donee organization. A taxpayer who makes more than one contribution of $250 or more to a donee organization in a taxable year may substantiate the contributions with one or more contemporaneous written acknowledgments. Section 170(f)(8) does not apply to a payment of $250 or more if the amount contributed (as determined under §1.170A?1(h)) is less than $250. Separate contributions of less than $250 are not subject to the requirements of section 170(f)(8), regardless of whether the sum of the contributions made by a taxpayer to a donee organization during a taxable year equals $250 or more.
The last sentence says that you do not aggregate separate contributions of less than $250 even if the total reaches $250. This sentence is the reason why one does not need an acknowledgement from a church to whom you donate $10 every time you visit. The $10 is a separate gift. The mileage allowance is considered a cash gift. Every time one drives to a charity to volunteer is a separate contribution. I see no reason why one has to aggregate all of those separate contributions.
===============The Tax Court ruling says otherwise. Sorry, but the courts are the arbiters of what a regulation means in the long run.
I am aware of what the regulation says. When I moved for reconsideration on that point, the Tax Court disagreed.
The tax court denied your deduction because you did not have a contemporaneous written acknowledgement from the charity. However, none of your charitable deductions were for mileage:
"During 1998, petitioner paid the following expenses with respect to the residence: Insurance of $841, utilities of $1,729, homeowner?s association dues of $30, pest control of $478, and repairs and maintenance of $1,704 (to replace a water heater, to clear brush around the perimeter of the residence, and to repair the furnace). Petitioner allocated these expenses to the Foundation using a percentage allocation and claimed a charitable contribution for the portion of the allocated expenses. Petitioner did not receive any written acknowledgment from the Foundation for any contributions purportedly made to the Foundation by petitioner during 1998. Nor did the Foundation report its receipt of any contributions during 1998."
As such, I do not see where the tax court ruled on that part of the regulation that does not require aggregation. I still feel comfortable not aggregating mileage.
The tax court denied your deduction because you did not have a contemporaneous written acknowledgement from the charity. However, none of your charitable deductions were for mileage:
"During 1998, petitioner paid the following expenses with respect to the residence: Insurance of $841, utilities of $1,729, homeowner?s association dues of $30, pest control of $478, and repairs and maintenance of $1,704 (to replace a water heater, to clear brush around the perimeter of the residence, and to repair the furnace). Petitioner allocated these expenses to the Foundation using a percentage allocation and claimed a charitable contribution for the portion of the allocated expenses. Petitioner did not receive any written acknowledgment from the Foundation for any contributions purportedly made to the Foundation by petitioner during 1998. Nor did the Foundation report its receipt of any contributions during 1998."
As such, I do not see where the tax court ruled on that part of the regulation that does not require aggregation. I still feel comfortable not aggregating mileage. ====================Granted, not for mileage, but the point was that each of the 38 transactions that made up the total was separately under the $250.00 threshold requiring acknowledgment, yet the Court imposed the acknowledgment requirement anyway on the aggregate.
It doesn't matter: The "out of pocket" transactions in the aggregate totaled more than $250.00 and the Court has ruled that such NEEDS acknowledgment -- regardless of what the regulation actually says. "Out of pocket" expenses for each charity ARE aggregated annually for purposes of acknowledgment. The IRS Publication is wrong.
I also argued that no acknowledgment was necessary as this was a deferred deduction - as it was part of an earlier gift but delayed until its value could be ascertained. The original year of gift was a year before paragraph
170(f)(8) was added to the IRC (i.e. 1990). That's not in the TC Memo.
Regardless, under the contract I had with the charity, I asked for reimbursement after losing the case, and when the charity went out of business (2007), I wrote it all off as a business bad-debt (cf. section 691 for its character). The IRS never challenged that write-off and even the 6 year period of limitations has expired on it. Therefore, I still got the deduction another way. My bad debt included other items that the charity was supposed to reimburse me under its original gift document (e.g. insurance) but never did.
Many CLUELESS people seem to have opinions on this case. Here is my web page about their opinions:
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There was a specific reason I was NOT an officer, director, or employee of the charity: We didn't want the IRS to say that it was a scam to avoid estate taxes on the property that the charity received by bequest. Therefore, I was to be isolated from asserting any control other than that of a hostile party.
"The requirements of sec. 1.170A-13(f)(1), Income Tax Regs., do not apply to separate contributions of less than $250 made to the same donee, even if the aggregate donations to the donee exceed $250 within the same taxable year."
Chief Counsel has never attempted to dispute this characterization, primarily because they like to focus on larger expenses, which of course are subject to the more extensive acknowledgment requirements.
"The requirements of sec. 1.170A-13(f)(1), Income Tax Regs., do not apply to separate contributions of less than $250 made to the same donee, even if the aggregate donations to the donee exceed $250 within the same taxable year."
Chief Counsel has never attempted to dispute this characterization, primarily because they like to focus on larger expenses, which of course are subject to the more extensive acknowledgment requirements. ===================== Do you have an explanation on why the Court 8 years earlier had gone the other way with regard to 26 U.S.C. 170(f)(8) and its regulation? Does your later case specifically state that my earlier case was wrongly decided? Footnotes 26 and 28 in Van Dusen, supra, are clearly contradictory to the Court's 2003 decision cited in footnote 39, which disallowed ALL "out-of-pocket" expenses IN AGGREGRATE, not only those separately $250 or more, for not having an acknowledgement. Yet the court allowed expenses separately less than $250 before aggregation as deductible when my case had not. The Court did not adequately explain why it was diverging from the earlier ruling.
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