All cash gifts must be substantiated for a donor to take a charitable deduction. Substantiation may include a cancelled check or a written communication from the recipient charity showing the name of the charity, the date of the contribution, and the amount of the contribution.
This new requirement, part of the recently passed Pension Protection Act of 2006, is effective for all taxable years beginning after August 17, 2006. This requirement supplements, without changing, the existing requirement for donors to receive a contemporaneous written acknowledgment from charities for charitable contributions of $250 or more.
It is important to note that while the donor substantiation laws apply directly to donors and not the recipient charities, donors may reasonably expect the charities to assist them by providing adequate substantiation to enable the donors to take a charitable deduction.