President Obama signed into law on March 25 the Philippines Charitable Giving Assistance Act (H.R. 3771), allowing taxpayers the option of accelerating into 2013 their charitable deduction for certain cash contributions made for the relief of victims of Typhoon Haiyan, which struck the Philippines in November 2013. Under the new law, a taxpayer may treat any otherwise qualifying cash contribution for the relief of victims made after the date of enactment (after March 25, 2014) and before April 15, 2014 as made on December 31, 2013, and not in 2014.
The Senate had approved the measure earlier on March 25 by unanimous consent. The House approved the measure on March 24.
The new law also provides that a “telephone bill” showing the name of the donee organization, the date of the contribution, and the amount of the contribution will be deemed to meet the recordkeeping requirements of Code Sec. 170(f)(17). That Code section ordinarily would require, among other things, a “written communication from the donee.”
Two questions may spring from this reference to “telephone bill”: (1) Does it include texting donations? (2) And, if so, are donations by texting not usually deductible if not protected within specific legislation?
In response to Question #1, texting donations are apparently covered, if not implied to be the main reason for the provision, The bill language in this new law for the most part mirrors the language used in the Hiring Incentives to Restore Employment (HIRE) Act (P.L. 111-126), Sec. 1, which accelerated the deduction of cash contributions made in relief of the victims of the January 11, 2010 earthquake in Haiti. The Joint Committee on Taxation Report (JCX-2-10) that accompanied the HIRE Act, in elaborating on the provision, commented: “Thus, for example, in the case of a charitable contribution made by text message and chargeable to a telephone or wireless account, a bill from the telecommunications company containing the relevant information will satisfy the requirement.”
In response to Question #2, donations by text technically probably must then ordinarily be acknowledged by the donee organization. IRS Pub 526, Charitable Contributions, under “When to Deduct” states: “Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account.” However, under “Recordkeeping,” Pub 526 only recites, as sufficient substantiation, “ “bank record,” “credit card statement,” or “a receipt …. from the qualifying organization.” A receipt from the telephone company is not included in this list.
Also of note: The period within which the contributions for Typhoon relief receive favorable treatment (March 26-April 14, 2014) appears to be drafted solely to encourage an immediate rush of new cash donations, since it does not similarly reward any contribution made previously in 2014 between the Jan 1 and March 25 period. The original version of the bill, as introduced in December, prospectively would have accelerated deductions for the January 1 through March 1, 2014 period.