In the realm of tax practice, the substantiation of deductions often proves to be a contentious area, particularly with noncash charitable contributions. The recent Tax Court Summary Opinion in John Henry Besaw v. Commissioner, T.C. Summary Opinion 2025-7, Docket No. 19222-22S (July 21, 2025), provides a stark reminder of the meticulous record-keeping required to preserve these deductions. This case underscores the importance of adhering strictly to statutory and regulatory substantiation rules, even when the underlying charitable intent is not disputed.

Case Background

John Henry Besaw (hereinafter, "petitioner") timely filed his 2019 joint federal income tax return with his spouse on April 15, 2020. On Schedule A, Itemized Deductions, the petitioner claimed a deduction of $6,760 for noncash charitable contributions. He included Form 8283, Noncash Charitable Contributions, and continuation sheets, which identified the donee organizations by name and address and provided short descriptions of the donations. However, the Form 8283 and its attachments notably lacked dates of the donations and the values of the donated items.

The Internal Revenue Service (IRS) subsequently examined the petitioner's 2019 tax return. During the examination, the petitioner submitted documents to substantiate his claimed deduction, including receipts from donee organizations that were dated and signed by their employees. Crucially, the sections on these receipts intended to identify the goods donated and their values were left blank. The petitioner also provided noncontemporaneous documents, titled "2019 Reconstructed from Form 8283 and Continuation Sheet," which he prepared after filing his return and sent to the IRS in 2022. These reconstructed documents included donee organizations, dates of donations, descriptions of donated items, and their "cost/current value". Based on these noncontemporaneous documents, the petitioner asserted entitlement to a charitable contribution deduction for both individual donations valued at $250 or more and property contributions valued at more than $500.

The IRS issued a Notice of Deficiency to the petitioner for tax year 2019, dated August 10, 2022, disallowing the $6,760 noncash charitable contributions deduction. The IRS's explanation for the disallowance was that the petitioner failed to meet the substantiation requirements, specifically noting the absence of the name and address of the qualifying organization(s), a list of what was donated, and the fair market value of each item on the date of contribution. While the Notice of Deficiency was issued to both the petitioner and his spouse, only the petitioner filed a Petition with the Tax Court.

The Petitioner's Request for Relief

The petitioner, acting pro se, contested the IRS's determination in Tax Court. After concessions by both parties, the sole remaining issue for decision was whether the petitioner was entitled to the deduction for noncash charitable contributions for the 2019 tax year. The petitioner's request for relief was essentially to have the disallowed $6,760 noncash charitable contribution deduction reinstated. He contended that his understanding of the legal requirements for noncash charitable contribution deductions only mandated the name and address of the donee organization and a description of the donated property, not the value of the donated items.

Court's Analysis of the Law

The Tax Court first addressed the burden of proof. In general, the Commissioner’s determination in a Notice of Deficiency is presumed correct, and the taxpayer bears the burden of proving that the determination is in error [Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933)]. Deductions are a matter of legislative grace, and the taxpayer bears the burden of proving entitlement to any claimed deduction [Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934)]. The Court noted that the burden of proof remained with the petitioner as he had not argued or established that Section 7491(a) (which can shift the burden to the Commissioner under certain conditions) applied. Taxpayers are required to maintain records sufficient to enable the Commissioner to determine the correct tax liability, substantiating both the amount and purpose of the related expense [I.R.C. § 6001; Treas. Reg. § 1.6001-1(a); Higbee v. Commissioner, 116 T.C. 438, 440 (2001)].

Regarding noncash charitable contribution deductions, the Court reiterated that while Section 170(a)(1) of the Internal Revenue Code allows deductions for charitable contributions, such deductions are permitted only if the taxpayer satisfies statutory and regulatory substantiation requirements [I.R.C. § 170(a)(1); Treas. Reg. § 1.170A-13]. The specific requirements vary depending on the type and size of the contribution.

For noncash contributions, the law requires them to be evidenced by a receipt from the donee organization [Treas. Reg. § 1.170A-13(b)(1)]. This receipt must show:

The name of the donee organization [Treas. Reg. § 1.170A-13(b)(1)].
The date and location of the contribution [Treas. Reg. § 1.170A-13(b)(1)].
A property description in detail reasonably sufficient under the circumstances [Treas. Reg. § 1.170A-13(b)(1)].

The Court clarified that a receipt is generally not required if obtaining one is impractical, and the reliability of records is determined by all relevant facts and circumstances [Treas. Reg. § 1.170A-13(b)(1), (2)]. Importantly, while the fair market value of the property is a factor in determining the detail needed, such value does not need to be stated on the receipt itself [Treas. Reg. § 1.170A-13(b)(1)(iii)].

Furthermore, the Court outlined additional requirements based on the donation amount:

Small amounts: Any written or other evidence from the donee organization acknowledging receipt is generally sufficient [Treas. Reg. § 1.170A-13(a)(2)(i)(C)].
$250 or more: These contributions necessitate a contemporaneous donee written acknowledgment containing specified information [I.R.C. § 170(f)(8); Treas. Reg. § 1.170A-13(f)].
Property exceeding $500: Additional written records are required to establish the item’s manner of acquisition, either the approximate date of acquisition or the approximate date the property was substantially completed, and the cost or other basis (adjusted as per Section 1016) [I.R.C § 170(f)(11)(A)(i), (B); Treas. Reg. § 1.170A-13(b)(3)(i)].

Application of Law to the Facts

Despite the petitioner attaching Form 8283 and continuation sheets to his 2019 return, which listed items with brief descriptions and donee names/addresses, these documents did not include values or dates of donation. At trial, the petitioner stated his understanding that values were not required, which the Court noted was a misunderstanding of the requirements.

A critical failure for the petitioner was the receipts provided from donee organizations during the audit. While these receipts were dated and signed, the sections for identifying the goods donated and their values were blank. The petitioner's attempt to remedy this by providing "reconstructed" documents in 2022 (after filing his 2019 return) was ultimately insufficient because these were noncontemporaneous. The Court did not find that it was impractical for the petitioner to obtain receipts that included descriptions of the donated items.

The Court explicitly stated that while it believed the petitioner donated items to charitable organizations in 2019, the record showed that he did not satisfy the substantiation requirements of Section 170(a)(1) and Treasury Regulation § 1.170A-13. The decisive factor was that none of the receipts he provided from the charitable organizations included any descriptions of the donated items. This failure alone was fatal to the deduction, regardless of whether other requirements for contributions of $250 or more or property valued over $500 were met.

Court's Conclusion

The Tax Court concluded that due to the petitioner’s failure to satisfy the substantiation requirements, particularly the lack of descriptions of donated items on the receipts, he was not entitled to deduct noncash charitable contributions for tax year 2019. Accordingly, a decision was entered for the respondent (Commissioner) as to the deficiency. However, the respondent had conceded that the petitioner was not liable for a Section 6662(a) accuracy-related penalty, so the decision was for the petitioner on that specific issue.

Lessons for Tax Professionals: Preserving the Deduction

The Besaw case serves as a crucial reminder for tax professionals advising clients on noncash charitable contributions. To properly preserve such deductions, clients must meticulously adhere to substantiation requirements, focusing on contemporaneous record-keeping.

Here are the key steps the taxpayer should have taken, and when, to preserve the deduction:

At the Time of Donation:
- Obtain a Detailed Receipt for Every Noncash Contribution: For every noncash contribution, the donor must obtain a receipt from the donee organization at the time of the contribution or soon thereafter [Treas. Reg. § 1.170A-13(b)(1)]. This receipt is foundational.
- Ensure Receipt Content is Complete: The receipt must clearly state:
  - The name of the donee organization [Treas. Reg. § 1.170A-13(b)(1)].
  - The date and location of the contribution [Treas. Reg. § 1.170A-13(b)(1)].
  - A property description in detail reasonably sufficient under the circumstances [Treas. Reg. § 1.170A-13(b)(1)]. This was the critical missing element in Besaw's case. While the fair market value does not need to be on the receipt, a clear description of what was donated is paramount [Treas. Reg. § 1.170A-13(b)(1)(iii)].
- For Contributions of $250 or More, Obtain Contemporaneous Written Acknowledgment: If the contribution's value is $250 or more, the donor must obtain a contemporaneous written acknowledgment from the donee organization [I.R.C. § 170(f)(8); Treas. Reg. § 1.170A-13(f)]. This acknowledgment must be obtained by the earlier of the date the return is filed or the due date (including extensions) for filing the return.
- Maintain Records for Property Exceeding $500: For contributions of property valued over $500, the taxpayer must maintain written records establishing:
  - The manner of acquisition of the item [I.R.C § 170(f)(11)(A)(i), (B); Treas. Reg. § 1.170A-13(b)(3)(i)].
  - Either the approximate date of acquisition or the approximate date the property was substantially completed [I.R.C § 170(f)(11)(A)(i), (B); Treas. Reg. § 1.170A-13(b)(3)(i)].
  - The cost or other basis of the donated property, adjusted as provided by Section 1016 [I.R.C § 170(f)(11)(A)(i), (B); Treas. Reg. § 1.170A-13(b)(3)(i)].
At the Time of Tax Return Preparation:
- Complete Form 8283 Accurately and Fully: As seen in Besaw, the Form 8283 and its attachments should be completed with all required information, including dates of donations, descriptions of donated items, and their fair market values. Even though fair market value is not required on the receipt, it is required on Form 8283.
- Ensure Internal Records are Robust: Taxpayers are required to maintain records sufficient for the Commissioner to determine correct tax liability, substantiating both the amount and purpose of the expense [I.R.C. § 6001; Treas. Reg. § 1.6001-1(a); Higbee v. Commissioner, 116 T.C. 438, 440 (2001)]. This goes beyond just donee receipts to include any personal records supporting the valuation and acquisition details.

The Besaw decision highlights that even a belief in charitable intent and an attempt to document donations will not suffice if the core regulatory requirements for substantiation, particularly detailed property descriptions on receipts, are overlooked. Tax professionals must proactively educate clients on these specific and often counterintuitive requirements to ensure their charitable contributions withstand IRS scrutiny.

Prepared with assistance from NotebookLM.

Henry Besaw v. Commissioner, T.C. Summary Opinion 2025-7, July 21, 2025