Post-attack charitable giving helps with taxes

WASHINGTON -- Tax season is getting easier for people and charities involved in the outpouring of generosity that followed the Sept. 11 attacks.

The Internal Revenue Service announced Wednesday it won't require as much immediate documentation as usual for people who made donations last fall, making it simpler for taxpayers to claim deductions and lifting a paperwork burden for hundreds of nonprofit organizations.

More than $2 billion has been contributed specifically in response to the attacks on New York and Washington, according to the Chronicle of Philanthropy. Much was donated to established groups such as the American Red Cross, but the IRS also lists 262 tax-exempt organizations that were created in the weeks after the attacks.

These less-experienced groups, tax experts say, could be having trouble getting out the paperwork a taxpayer needs to justify claiming a charitable deduction.

"More established charities are more accustomed to sending out letters automatically," said Bob D. Scharin, editor of Warren, Gorham & Lamont's Practical Tax Strategies.

Current law requires taxpayers making contributions of $250 or more to have "contemporaneous" written documentation from a charity if their tax return is challenged. A canceled check by itself isn't good enough, because cheaters could pad the amount with money used for some non-charitable purpose.

For contributions made after Sept. 11 and before the end of 2001, the rules have been relaxed for deductions that could be claimed on tax returns due April 15 in most of the country.

The IRS says taxpayers who made such donations will have until Oct. 15 to either obtain the normal written acknowledgement or show a good-faith effort to get one. Such an effort could include a letter or an e-mail sent to the charity.

Other rules remain the same. For instance, a qualified appraisal is required for any noncash contribution over $5,000, or over $10,000 for securities that are not traded publicly.

Taxpayers who traveled to New York or Washington to help a church or charitable group with recovery efforts could also qualify for deductions. Reasonable out-of-pocket food, lodging and travel expenses -- including 14 cents per mile for people who drove -- can be deducted, but not if the taxpayer was already reimbursed.

"It would be helpful to get a letter saying that you were not reimbursed," Scharin said.