Roadmap with Irina - March 2026

I recently read an article on the Bradford Tax Institute website about non-monetary donations and thought that it might be useful for you as well while preparing your taxes. Here is the whole article below. 

"Brutal IRS Trap Wipes Out Goodwill Clothing Deductions

John Besaw donated $6,760 worth of goods to charity and followed what he thought were all the rules. The IRS didn’t question whether his donations were legitimate; they denied the deduction because of a documentation technicality that most taxpayers have never heard of.

In Besaw, the Tax Court delivered a harsh reminder: documentation rules for charitable deductions are rigid and unforgiving. Congress and the IRS have created rules so detailed and inflexible that even very generous donors can lose their deductions over a technicality.

And the mistake that cost Besaw his deduction? It’s probably lurking in your tax files right now.

Good Intentions Aren’t Enough

Besaw, a Washington state resident, claimed his deduction for non-cash charitable contributions on his 2019 return. Noble enough. Americans donate billions in clothing, household goods, and other property to charity each year, and Congress, showing rare generosity, permits taxpayers to deduct the fair market value of those donations.

But here’s the rub: Congress forces donors to jump through increasingly elaborate hoops to claim these deductions, particularly for contributions exceeding $500. The requirements function as strict laws, not suggestions. The IRS demands absolute compliance. Without the right records, the deductions are effectively off the table.

What Went Wrong

Besaw filed Form 8283, Noncash Charitable Contributions, listing each charity's name and address. He even included short descriptions of the donated property. So far, so good, or so one might think.
The problem? He left two key details blank: the donation dates and the values of the donated items. These omissions weren't trivial, they were dealbreakers.

When the IRS came calling, Besaw tried to fix the deduction issue by creating a document he titled “2019 Reconstructed from Form 8283 and Continuation Sheet.” That record listed donation organizations, donation dates, item descriptions, and each item’s cost and current value. One might generously call that “after the fact compliance.” The Tax Court chose another phrase: too late.

The Legal Framework (aka the Gauntlet)

You can deduct charitable contributions, but, and this part is critical, only when you satisfy the substantiation requirements that law and regulation demand. The rules tighten as the donation amount increases, with larger contributions triggering stricter documentation standards.
As you may recall from our October 2023 article, “Why Did Duncan Bass Make 172 Trips to Goodwill and the Salvation Army”, the Internal Revenue Code and Treasury regulations require donors who give $250 or more to obtain contemporaneous written acknowledgment from the charity. That acknowledgment must include specific information.

“Contemporaneous” means the donor receives the acknowledgment no later than the earlier of the filing date or due date of the return (including extensions). Donors who try to re-create receipts later, no matter how carefully, fail to meet the rule.

When donations exceed $500, donors must keep written records that show how and when they acquired the property along with its cost or adjusted basis.
Once the donation passes $5,000, the law demands even more: donors must secure a qualified appraisal for most property types.

Donors report these contributions on Form 8283, which must list the property’s fair market value. Although the receipt from the charity doesn’t need to include fair market value, the form absolutely does. Besaw’s didn’t.

The Court’s Ruling

The Tax Court delivered a clear and uncompromising analysis. Even if John Besaw met the documentation rules for donations over $250 and for property gifts over $500, he still failed a basic requirement: none of the receipts from the charities described the donated items.

IRS regulations treat that omission as fatal.’ Without item descriptions on contemporaneous receipts, taxpayers lose the deduction for non-cash charitable contributions. Period. Full stop. The court denied the entire $6,760 deduction.

Why Charity Receipts Fall Short

Tax law demands detailed, itemized descriptions of every donated item, but charities rarely issue receipts with that level of detail.

Think about your last trip to Goodwill or the Salvation Army. You pulled up, unloaded bags or boxes of clothing and household items, and received a receipt listing the organization’s name, address, and maybe a vague phrase such as “miscellaneous household items.”

The employee at the donation center certainly didn’t catalog each shirt, record every kitchen utensil, or describe the condition of your donated microwave.
This practice makes perfect sense from the charity's point of view. These organizations focus on collecting and redistributing donated goods, not on performing detailed inventory assessments for tax compliance. Cataloging every item would overwhelm their staff and resources.

Yet the Tax Court interprets the regulations to require exactly those itemized descriptions on contemporaneous receipts. Congress imposed that strict rule to stop inflated valuations and to ensure that deductions reflect genuine charitable transfers. But the same rule traps unwary taxpayers who believe that simply making charitable donations and obtaining receipts satisfies their obligations.

The contemporaneous documentation requirement deserves special attention. Once an IRS audit starts, taxpayers can't fix defective records; the window for proper substantiation has already closed.

This harsh rule creates substantial risks for taxpayers who assume they can “fix” their records if questioned.

The Solution (Such As It Is)

The court opinion offers a practical workaround: Donors should create detailed lists of their donated items, including descriptions, and give those lists to the charity. The charity can then attach the lists to its acknowledgment receipts.
This method puts the documentation responsibility exactly where it belongs, on the taxpayer who claims the deduction. Donors know what they contributed, can photograph the items before delivering them, and can prepare an inventory at the time of donation. The charity simply needs to confirm receipt of the items listed by the donor.

Some practical steps for donors:

• Before donation, prepare a detailed list of items to be donated, including descriptions, acquisition dates, original costs, and estimated fair market values.
• Photograph items before donation, particularly for larger or higher-value items.
• Provide the list to the done organization at the time of donation.
• Request that the done acknowledgment specifically reference and incorporate your list of donated items.
• Obtain the acknowledgment before filing your return, or by the return’s due date including extensions (whichever is earlier).
• Complete Form 8283 accurately and completely, including all required values and dates.
• Retain everything: your list, photographs, the done acknowledgment, Form 8283, and any other supporting documentation.

Takeaways

Most charitable organizations provide generic receipts without itemized lists. The burden is on you to create detailed records of what you donated.

Before donating, prepare a detailed list of items that includes descriptions, dates, costs, and estimated values. Provide this list to the charity, and request that they incorporate it into their acknowledgment receipt.

You must obtain proper documentation before filing your return (or by the return’s due date with extensions). You cannot fix incomplete records after an IRS audit begins.

Keep photographs of donated items, your itemized lists, charity acknowledgments, Form 8283, and all supporting records. With complete documentation, even legitimate donations can be disallowed entirely."