More than 400,000 tax-exempt charities are receiving requests from the Internal Revenue Service asking for help to inform contributors about the deductibility of contributions made in connection with fund-raising events.
The IRS said Congress expressed concern that contributors may not be receiving accurate information about what portion of their contributions are deductible when merchandise or benefits are received in return for payment of a specified minimum amount.Only a portion of a contribution may be deductible when the activity includes charity balls, bazaars, banquets, auctions, concerts, athletic events and solicitations for membership or contributions when merchandise or benefits are received in return.
Publication 1391, "Deductibility of Payments Made to Charities Conducting Fund-Raising Events," contains a message from IRS Commissioner Lawrence B. Gibbs and reprints Revenue Ruling 67-246.
The ruling sets out guidelines for deductions of such contributions and offers examples of typical fund-raising situations in which all or part of a gift is not deductible.
Gibbs announced that a special 1988 tax-year program will focus on the fund-raising practices of charitable organizations to see if taxpayers are being given enough information about the deductibility of their contributions.