In God We Trust; All Others Must File Documentation

The IRS will begin requiring documentation to deduct cash donations of any amount next year. That means church-goers who put cash in collection baskets may have to switch to checks if they want to claim it on their taxes.

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MADELEINE BRAND, host:

Time to get your financial health in order. There's less than a week to get a tax credit this year for charitable donations. Beginning next year, new tax rules go into effect. One of them, if you give to your local house of worship, you'll need a receipt for those cash donations.

NPR's Audie Cornish has more.

AUDIE CORNISH: It's Sunday morning at the Covenant Baptist Church in Nashville, where Christmas services are getting underway.

(Soundbite of choir)

As church member Ken Youngsted(ph) takes his seat, he says he gives regularly to the church and makes extra gifts around Christmas. He says he always writes his name on his offering envelope and even keeps track of the extra dollar or change he occasionally adds to the plate.

Mr. KEN YOUNGSTED: I'm an accountant and I do my own taxes and every dollar matters to me.

CORNISH: But when he checks in with fellow church members such as Dr. Wayne Brown(ph), Youngsted finds not everyone is so diligent.

Mr. YOUNGSTED: When you give that money, just a $20 bill here or there to a charity, whether it's a walkathon, the Salvation Army, do you try to deduct that on your tax return?

Dr. WYANE BROWN: Ah, for the most part, yeah. Sometimes, with cash, it's hard to. I just sort of estimate it. And the accountant said, Dr. Brown, you got to write this stuff down. You and I both are going to jail.

CORNISH: And Dr. Brown's accountant isn't the only one who's wagging fingers come tax time. In 2004, nearly 41 million Americans claimed deductions totally $165 billion in charitable donations. Of those claims, $123 billion were for cash gifts.

Professor BRAD CHILDS (Nashville Belmont University): Well, it's true. It actually was an honor system. People really were supposed to. You know, if they gave money at church on a Sunday, they should had gone home right away and pulled out their logbook and wrote it down. I just know that people don't do that.

CORNISH: Brad Childs is a tax professor at Nashville's Belmont University.

Prof. CHILDS: When it comes that time at the end of the year, they go ahead and put that number down on their tax return knowing that, well, if they got audited, they can recreate it.

CORNISH: But not anymore. Come January 1st, neither your handwritten notes, nor your hazy recollections are going to cut it if you get audited. This summer, Congress passed new laws requiring that people keep proof of their cash donations, either a bank record or statement from the charity, in order to claim a tax deduction. The change targets people prone to padding their claims. So, it doesn't matter if it's pocket change or an extra 50 in the collection plate. If you want to deduct it, start writing checks instead.

That's what Nashville Methodist pastor Judy Hoffman says she'll be advising parishioners who ask.

Pastor JUDY HOFFMAN (Methodist Church, Nashville): I also don't think that there is a great panic but some thought will need to be given to how it is that we help people interpret this for themselves in their lives. Most folks who attend this congregation and other congregations I know love to give and they don't want that to be lost in the taxation laws that are out there. So, we'll have to help them.

CORNISH: Meanwhile, don't expect a receipt from your street corner Santa anytime soon. The Salvation Army says it has no plans yet to saddle its holiday volunteers with the paper work.

Audie Cornish, NPR News, Nashville.

NOAH ADAMS, host:

One final thought today on the death of former President Gerald Ford.

BRAND: In today's political climate, if you haven't formed a presidential search committee for 2012, you're probably already out of contention. Gerald Ford, though, came from a different era.

ADAMS: He turned down a professional football career to go to law school. He served in the military. And when he became president, many in America may not have known much about Gerald Ford.

BRAND: But the voters in Michigan's 5th Congressional District did. They had elected him 12 times to the House of Representatives and those close to Gerald Ford say that was a part of his legacy he was most proud of.

DAY TO DAY is a production of NPR News with contributions from Slate.com. I'm Madeleine Brand.

ADAMS: And I'm Noah Adams.

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