Reg

53126

Federal Register / Vol. 60, No. 197 / Thursday, October 12, 1995 / Rules and Regulations

Maine
Kevin W. Concannon, Commissioner,
Department of Human Services, # 11 State
House Station, Augusta, ME 04333–0011
Contact Person: Sophie Glidden, Director,
Office of Primary Health Care, Department of
Human Services, # 11 State House Station,
Augusta, ME 04333–0011.

Resource Development, 311 Ashe Avenue,
Raleigh, NC 27606
North Dakota

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Jon R. Rice, M.D., State Health Officer, State
Department of Health and Consolidated
Laboratories, 600 East Boulevard Avenue,
Bismarck, ND 58505–0200

26 CFR Parts 1 and 602

Massachusetts
Ms. Sally Fogarty, Department of Public
Health, 150 Tremont Street, Boston, MA
02111
Applications must be signed by: Mr. David
H. Mulligan, Commissioner of Public Health
(address is the same as Sally Fogarty).

Oklahoma

Substantiation Requirement for Certain
Contributions

Michigan
Ms. Vernice Davis Anthony, Director,
Michigan Department of Public Health,
3423 N. Martin Luther King Jr. Blvd., P.O.
Box 30195, Lansing, MI 48909

Patricia Nolan, M.D., M.P.H., Director, Rhode
Island Department of Health, Cannon
Building, 3 Capitol Hill, Providence, RI
02908–5097

Minnesota

Mr. Mark Jordan, Director, Office of Primary
Care, Department of Health and
Environmental Control, 2600 Bull Street,
Columbia, SC 29201

Ms. Chari Konerza, Director, Minnesota
Office of Rural Health and Primary Care,
P.O. Box 64975, St. Paul, MN 55164
Mississippi
Mr. Harold Armstrong, State Department of
Health, P.O. Box 1700, Jackson, MS 39215–
1700
Missouri
Coleen Kivlahan, M.D., M.S.P.H., Director,
Missouri Department of Health, P.O. Box
570, Jefferson City, MO 65102
Contact: Mr. Alan Welles (at same address)
may also sign applications).
Montana
Mr. Robert J. Robinson, Director, Department
of Health and Environmental Sciences,
Cogswell Building, P.O. Box 200901,
Helena, MT 59620–0901
Nebraska
Mark B. Horton, M.D., M.S.P.H., Director,
Nebraska Department of Health, 301
Centennial Mall South, P.O. Box 95007,
Lincoln, NE 68509–5007
Nevada
Donald S. Kwalick, M.D., MPH, State Health
Officer, Nevada State Health Division, 505
E. King Street, Room 201, Carson City, NV
89701
New Mexico
J. Alex Valdez, Secretary, State of New
Mexico, Department of Health, 1190 St.
Francis Drive, P.O. Box 261110, Sante Fe,
NM 8750–6110
New York
Ms. Karen Schimke, Executive Deputy
Commissioner, New York State Department
of Health, Empire State Plaza, Corning
Tower, Albany, NY 12237
Contact person: Edward Salsberg, Director
of the Bureau of Health Resources
Development.
North Carolina
Mr. James D. Bernstein, Director, North
Carolina Office of Rural Health and

Robert D. Vincent, Ph.D., Deputy
Commissioner, Health Promotion and
Policy Analysis, 1000 NE 10th Street,
Oklahoma City, OK 73117–1299
Rhode Island

South Carolina

South Dakota
Ms. Barbara A. Smith, Secretary, South
Dakota Department of Health, 445 East
Capitol Avenue, Pierre, SD 57501–3185
Tennessee
Dr. Fredia Wadley, Commissioner, Tennessee
Department of Health, 9th Floor, Tennessee
Tower, 312 8th Avenue North, Nashville,
TN 37247–0101
Texas
Dr. David Smith, Commissioner of Health,
Texas Department of Health, 1100 West
49th Street, Austin, TX 78756–3199
Vermont
Jan K. Carney, M.D, M.P.H., Commissioner,
Vermont Department of Health, 108 Cherry
Street, P.O. Box 70, Burlington, VT 05402
Washington
Mr. Verne A. Gibbs, Director, Washington
State Department of Health, Community
and Rural Health, P.O. Box 47834,
Olympia, WA 98504–7834
West Virginia
Ms. Gretchen O. Lewis, Secretary (Signator),
Department of Health and Human
Resources, Building 3, Room 206, State
Capitol Complex, Charleston, WV 25305
Applications to go to following for review:
Linda Atkins, Director, Health Professions
Recruitment Program, 1411 Virginia Street,
East, Charleston, WV 25301.
Wisconsin
John D. Chapin, Interim Administrator,
Wisconsin Divison of Health, P.O. Box 309,
Madison, WI 53701–0309
[FR Doc. 95–25224 Filed 10–11–95; 8:45 am]
BILLING CODE 8230–01–M

[TD 8623]
RIN 1545–AS27

Internal Revenue Service (IRS),
Treasury.
ACTION: Final and temporary
regulations.
AGENCY:

This document contains final
regulations that provide guidance
regarding the substantiation
requirements for charitable
contributions of $250 or more contained
in section 170(f)(8) of the Internal
Revenue Code. The guidance contained
in these final regulations will affect
organizations described in section
170(c) and individuals and entities that
make payments to those organizations.
EFFECTIVE DATE: January 1, 1994.
FOR FURTHER INFORMATION CONTACT:
Jefferson K. Fox, 202–622–4930 (not a
toll-free call).
SUMMARY:

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act
The collection of information
contained in these final regulations has
been reviewed and approved by the
Office of Management and Budget in
accordance with the Paperwork
Reduction Act (44 U.S.C. 3504(h)) under
control number 1545–1431. Responses
to this collection of information are
required to substantiate deductions
under section 170 of the Internal
Revenue Code for certain charitable
contributions. An agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
information unless the collection
displays a valid control number.
The estimated burden per
recordkeeper varies from 15 minutes to
30 minutes, depending on individual
circumstances, with an estimated
average of 25 minutes.
Comments concerning the accuracy of
this burden estimate and suggestions for
reducing this burden should be sent to
the Internal Revenue Service, Attention:
IRS Reports Clearance Officer, PC:FP,
Washington, DC 20224, and to the
Office of Management and Budget, Attn:
Desk Officer for the Department of the
Treasury, Office of Information and
Regulatory Affairs, Washington DC
20503.
Books or records relating to this
collection of information must be

Federal Register / Vol. 60, No. 197 / Thursday, October 12, 1995 / Rules and Regulations
retained as long as their contents may
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) relating to the substantiation
requirements under section 170(f)(8) of
the Internal Revenue Code of 1986.
Section 170(f)(8) was added by section
13172 of the Omnibus Budget
Reconciliation Act of 1993, Public Law
103–66 (107 Stat. 455, 1993–3 C.B. 43).
Temporary regulations (TD 8544) and
a notice of proposed rulemaking by
cross-reference to temporary regulations
under section 170(f)(8) were published
in the Federal Register for May 27, 1994
(59 FR 27458, 27515). The regulations
primarily address the substantiation of
contributions made by payroll
deduction and the substantiation of a
payment to a donee organization in
exchange for goods or services with
insubstantial value.
A public hearing was held on
November 10, 1994. On March 22, 1995,
the IRS released Notice 95–15, which
was published in 1995–15 I.R.B. 22,
dated April 10, 1995. Notice 95–15
provides transitional relief (for 1994)
from the substantiation requirement of
section 170(f)(8).
After consideration of the public
comments regarding the proposed
regulations, the regulations are adopted
as revised by this Treasury decision,
and the corresponding temporary
regulations are removed.
Explanation of Statutory Provisions
Section 170 allows a deduction for
certain charitable contributions to or for
the use of an organization described in
section 170(c). Under section 170(f)(8),
taxpayers who claim a deduction for a
charitable contribution of $250 or more
must obtain substantiation of that
contribution from the donee
organization and maintain the
substantiation in their records. See H.R.
Conf. Rep. 213, 103d Cong., 1st Sess.
565 (1993). Specifically, section
170(f)(8)(A) provides that no charitable
contribution deduction will be allowed
under section 170(a) for a contribution
of $250 or more unless the taxpayer
substantiates the contribution with a
contemporaneous written
acknowledgment from the donee
organization.
Section 170(f)(8)(B) provides that an
acknowledgment meets the
requirements of section 170(f)(8)(A) if it
includes the following information: (a)

The amount of cash and a description
(but not necessarily the value) of any
property other than cash contributed; (b)
whether or not the donee organization
provided any goods or services in
consideration for the cash or other
property contributed; and (c) a
description and good faith estimate of
the value of any goods or services
provided by the donee organization in
consideration for the cash or other
property contributed, or if the goods or
services consist solely of intangible
religious benefits, a statement to that
effect.
Under section 170(f)(8)(C), a written
acknowledgment is contemporaneous,
for purposes of section 170(f)(8)(A), if it
is obtained on or before the earlier of:
(a) The date the taxpayer files its
original return for the taxable year in
which the contribution was made, or (b)
the due date, including extensions, for
filing the taxpayer’s original return for
that year.
Section 170(f)(8)(E) directs the
Secretary to prescribe such regulations
as are necessary or appropriate to carry
out the purposes of section 170(f)(8),
including regulations that may provide
that some or all of the requirements of
section 170(f)(8) do not apply in
appropriate cases.
Public Comments
Contributions Made by Payroll
Deduction
The proposed regulations permit a
taxpayer to substantiate contributions
made by payroll deduction by a
combination of two documents: (a) A
pay stub, Form W–2, or other document
furnished by the taxpayer’s employer
that evidences the amount withheld
from the taxpayer’s wages, and (b) a
pledge card or other document prepared
by the donee organization that states
that the donee organization did not
provide any goods or services as whole
or partial consideration for any
contributions made by payroll
deduction.
Commentators reported that pledge
cards are frequently prepared by
employers at the direction of the donee
organization. They suggested that the
IRS accept pledge cards with the
required language if the pledge cards are
prepared either by the employer or by
the donee organization. In response to
this suggestion, these final regulations
provide that pledge cards prepared by
the donee organization or by another
party at the donee organization’s
direction can be used as part of the
substantiation for a contribution made
by payroll deduction.

53127

Commentators asked whether a Form
W–2 that reflects the total amount
contributed by payroll deduction, but
does not separately list each
contribution of $250 or more, can be
used as evidence of the amount
withheld from the employee’s wages to
be paid to the donee organization.
Section 170(f)(8)(B) provides that an
acknowledgment must reflect the
amount of cash and a description of
property other than cash contributed to
the charitable organization. When a
taxpayer makes multiple contributions
to a charitable organization, the statute
does not require the acknowledgment to
list each contribution separately.
Consequently, an acknowledgment
provided for purposes of section
170(f)(8) may substantiate multiple
contributions with a statement of the
total amount contributed by a taxpayer
during the year, rather than an itemized
list of separate contributions. Therefore,
a Form W–2 reflecting an employee’s
total annual contribution, without
separately listing the amount of each
contribution, can be used as evidence of
the amount withheld from the
employee’s wages. Because the statute
does not require an itemized
acknowledgment, it was unnecessary to
clarify the proposed regulations to
address this concern.
Commentators also asked whether the
donee organization must use any
particular wording on the pledge card or
other document prepared for purposes
of substantiating a charitable
contribution made by payroll deduction.
Because the IRS and the Treasury
Department do not believe that any
particular wording is required, these
final regulations clarify that the pledge
card or other document is only required
to include a statement to the effect that
no goods or services were provided in
consideration for the contribution made
by the payroll deduction.
Commentators asked for guidance
regarding the proper method of
substantiating lump-sum contributions
made by employees through their
employers other than by payroll
withholding. Commentators stated that
employees occasionally make
contributions in the form of checks
payable to their employer, who then
deposits the checks in an employer
account and sends the donee
organization a single check drawn on
the employer account. When employees’
payments are transferred to a donee
organization in this manner, it is
difficult for the organization to identify
the persons who made contributions,
and thus the employees may be unable
to obtain the requisite substantiation.
These difficulties can be eliminated if

53128

Federal Register / Vol. 60, No. 197 / Thursday, October 12, 1995 / Rules and Regulations

the employees’ contribution checks are
made payable to the donee organization
and the employer simply forwards the
employees’ checks to the donee
organization. The donee organization
can then provide substantiation as it
would for any individual contribution
made by check. Therefore, the final
regulations have not been modified to
address this point.
Goods or Services With Insubstantial
Value
The proposed regulations provide that
goods or services that have insubstantial
value under the guidelines provided in
Rev. Proc. 90–12 (1990–1 C.B. 471), and
Rev. Proc. 92–49 (1992–1 C.B. 987), and
any successor documents, are not
required to be taken into account for
purposes of section 170(f)(8). The IRS
re-proposed this provision in proposed
regulations under section 170(f)(8) that
were published in the Federal Register
for August 4, 1995 (60 FR 39896), and
it has therefore been deleted from these
final regulations. Taxpayers may rely on
those proposed regulations for payments
made on or after January 1, 1994.
Additional Comments Addressed in
Proposed Regulations Published in the
Federal Register for August 4, 1995
Commentators raised a number of
other questions about the substantiation
regulations, including the following: (a)
whether, in calculating a charitable
contribution deduction, a donor can rely
on a donee organization’s estimate of
the fair market value of any quid pro
quo provided to the donor, (b) how
certain types of benefits provided to a
donor are to be valued, (c) how the fair
market value of goods or services sold
at a charity auction can be established,
(d) how goods or services are to be
treated when provided to a donor who
has no expectation of receiving a quid
pro quo, (e) how unreimbursed out-ofpocket expenses incurred by a taxpayer
incident to the rendition of services to
a donee organization can be
substantiated, and (f) how certain
transfers to a charitable remainder trust
can be substantiated. The proposed
regulations published August 4, 1995,
address these questions, as explained in
the preamble to those proposed
regulations.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in EO
12866. Therefore, a regulatory
assessment is not required. It has also
been determined that section 553(b) of

§ 1.170A–13 Recordkeeping and return
requirements for deductions for charitable
contributions.

(B) A pledge card or other document
prepared by or at the direction of the
donee organization that includes a
statement to the effect that the
organization does not provide goods or
services in whole or partial
consideration for any contributions
made to the organization by payroll
deduction.
(ii) Application of $250 threshold. For
the purpose of applying the $250
threshold provided in section
170(f)(8)(A) to contributions made by
the means described in paragraph
(f)(11)(i) of this section, the amount
withheld from each payment of wages to
a taxpayer is treated as a separate
contribution.
(12) Distributing organizations as
donees. An organization described in
section 170(c), or an organization
described in 5 CFR 950.105 (a Principal
Combined Fund Organization for
purposes of the Combined Federal
Campaign) and acting in that capacity,
that receives a payment made as a
contribution is treated as a donee
organization solely for purposes of
section 170(f)(8), even if the
organization (pursuant to the donor’s
instructions or otherwise) distributes
the amount received to one or more
organizations described in section
170(c). This paragraph (f)(12) does not
apply, however, to a case in which the
distributee organization provides goods
or services as part of a transaction
structured with a view to avoid taking
the goods or services into account in
determining the amount of the
deduction to which the donor is entitled
under section 170.
(13) through (15) [Reserved]
(16) Effective date. Paragraphs (f) (11)
and (12) of this section apply to
contributions made on or after January
1, 1994.

*

§ 1.170A–13T

the Administrative Procedure Act (5
U.S.C. chapter 5) and the Regulatory
Flexibility Act (5 U.S.C. chapter 6) do
not apply to these regulations, and,
therefore, a Regulatory Flexibility
Analysis is not required. Pursuant to
section 7805(f) of the Internal Revenue
Code, the notice of proposed rulemaking
preceding these regulations was
submitted to the Small Business
Administration for comment on its
impact on small business.
Drafting Information: The principal authors
of these regulations are Jefferson K. Fox,
Office of the Assistant Chief Counsel (Income
Tax & Accounting), IRS, and Joel S. Rutstein
and Rosemary DeLeone, who are formerly of
that office. However, other personnel from
the IRS and Treasury Department
participated in their development.

List of Subjects
26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
26 CFR Part 602
Reporting and recordkeeping
requirements.
Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602
are amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by removing the
entry for 1.170A–13T and the general
authority continues to read as follows:
Authority: 26 U.S.C. 7805. * * *

Par. 2. In § 1.170A–13, paragraph (e)
is added and reserved and paragraph (f)
is added to read as follows:

*
*
*
*
(e) [Reserved]
(f) Substantiation of charitable
contributions of $250 or more.
(1) through (10) [Reserved]
(11) Contributions made by payroll
deduction—(i) Form of substantiation.
A contribution made by means of
withholding from a taxpayer’s wages
and payment by the taxpayer’s employer
to a donee organization may be
substantiated, for purposes of section
170(f)(8), by both—
(A) A pay stub, Form W–2, or other
document furnished by the employer
that sets forth the amount withheld by
the employer for the purpose of
payment to a donee organization; and

[Removed]

Par. 3. Section 1.170A–13T is
removed.
PART 602—OMB CONTROL NUMBERS
UNDER THE PAPERWORK
REDUCTION ACT
Par. 4. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
§ 602.101

[Amended]

Par. 5. In § 602.101, paragraph (c) is
amended by removing the entry for
1.170A–13T from the table and revising
the entry for 1.170A–13 to read as
follows:

Federal Register / Vol. 60, No. 197 / Thursday, October 12, 1995 / Rules and Regulations
Rulemaking entitled ‘‘Drawbridge
Operation Regulations; New Jersey
Intracoastal Waterway, New Jersey’’ in
the Federal Register (60 FR 12178). The
*
*
*
*
*
Coast Guard received four comments on
1.170A–13 ............................
1545–0074
1545–0754 the Notice of Proposed Rulemaking. One
1545–0908 offered no objection and three opposed
1545–1431 the proposal. Objections cited the need
for visual observation to safely operate
*
*
*
*
*
the bridge from a remote location;
concern over the ability of the bridge to
Dated: September 22, 1995.
open in an emergency; and concern for
Margaret Milner Richardson,
the safety of navigation and nearby
Commissioner of Internal Revenue.
children.
Approved:
The Coast Guard believes the
drawbridge is adequately equipped to
Leslie Samuels,
meet these concerns. The bridge is
Assistant Secretary of the Treasury.
equipped with eight cameras which
[FR Doc. 95–25058 Filed 10–11–95; 8:45 am]
provide visual coverage of the entire
BILLING CODE 4830–01–U
bridge and waterway. One of the eight
cameras has zoom and pan action
capability covering a 360 degree arc.
DEPARTMENT OF TRANSPORTATION
Whenever the remote control system
equipment is partially disabled, or fails
Coast Guard
for any reason, the bridge will be
physically tended and operated from a
33 CFR Part 117
local control site as soon as possible, but
[CGD05–94–092]
in no case later than an hour after the
malfunction. The bridge is equipped
Drawbridge Operation Regulations;
with a radiotelephone capable of
Beach Thorofare, New Jersey
communicating in both local and remote
AGENCY: Coast Guard, DOT.
control locations. The bridge is also
ACTION: Final rule.
equipped with directional microphones
and horns with the ability to receive and
SUMMARY: The Coast Guard is changing
deliver signals. A public hearing was
the regulations governing operation of
not requested, and one was not held.
the National Railroad Corporation
Background and Purpose
(AMTRAK)/New Jersey Transit Rail
Operation (NJTRO) drawbridge across
A permit was issued by the Coast
the Beach Thorofare, New Jersey
Guard on December 20, 1988, to replace
Intracoastal Waterway, mile 68.9, at
and slightly raise the superstructure of
Atlantic City, New Jersey. This change
the Beach Thorofare Bridge. The new
to the regulations will allow the bridge
drawbridge provides a vertical clearance
to be operated remotely from
of 4 feet at mean high water and 9 feet
AMTRAK’s Philadelphia office. This
at mean low water when in the closed
change is being made in an effort to
position. Prior to its rehabilitation in
combine bridgetender and dispatcher
1988, the old bridge was left in the open
positions, enhance rail safety operations position and unused for 5 to 10 years.
and reduce operating costs. This action
However, the regulations governing
will relieve AMTRAK of the burden of
operation of this bridge require that the
having a person constantly at the bridge bridge open on signal from 11 p.m. to
to open the draw, and will still provide
6 a.m. From 6 a.m. to 11 p.m., the draw
for the reasonable needs of navigation.
is required to open on signal from 20
EFFECTIVE DATE: November 13, 1995.
minutes to 30 minutes after each hour
FOR FURTHER INFORMATION CONTACT: Gary and remain open for all waiting vessels.
Kassof, Bridge Administrator, NY, Fifth
As a result of the rehabilitation and
Coast Guard District (212) 668–7069.
replacement work, the bridge now
operates according to the published
SUPPLEMENTARY INFORMATION:
regulations. AMTRAK seeks to operate
Drafting Information: The principal
the bridge remotely from its
persons involved in drafting this document
Philadelphia office.
are Mr. J. Arca, Fifth Coast Guard District,
The Beach Thorofare section of the
Bridge Branch, NY, Project Manager, and
New Jersey Intracoastal Waterway is
CAPT R. A. Knee, Fifth Coast Guard District
used primarily by recreational power
Legal Office, Project Counsel.
boats ranging in length from eighteen
Regulatory History
(18) to thirty-eight (38) feet. The bridge
On March 6, 1995, the Coast Guard
is required to open for vessel traffic
published a Notice of Proposed
infrequently during the winter months.
CFR part or section where
identified and described

Current OMB
control No.

53129

The number of openings increase during
the normal boating season.
However, the number of openings is
not excessive. During the period from
February 1994 through June 1994,
drawlogs for the Beach Thorofare Bridge
showed the bridge averaged 1 opening
per day in February, 1 to 2 openings per
day in March, 2 openings per day in
April, 6 openings per day in May, and
7 openings per day in June. During the
same 5 month period, data provided by
AMTRAK showed the number of trains
per month crossing the bridge in both
directions remained fairly constant,
averaging between 900 and 1,000 trains
per month. The vast majority of these
trains are passenger/shuttle type trains
transporting persons wishing to visit
Atlantic City, New Jersey. Train traffic
across the bridge is proportionately
much heavier than waterway traffic
requiring openings of the bridge.
Because of the relatively few requests
for bridge openings, AMTRAK would
like to combine the bridgetender and
train dispatcher positions in its
Philadelphia office. By controlling
openings of the bridge and movement of
trains across the bridge remotely from
one location, AMTRAK can reduce
operating costs and still closely monitor
operations at the bridge.
The Coast Guard has no record of any
vessel allisions with this bridge. The
vessels that do use this waterway are
relatively small, and it is unlikely that
they could create major damage to the
bridge even if a vessel/bridge allision
did occur. Therefore, safety does not
appear to be a significant concern in the
evaluation of this request.
This change establishes procedures
and criteria for remote operation of the
drawbridge, while still providing for the
needs of navigation.
Regulatory Evaluation
This rule is not a significant
regulatory action under section 3(f) of
Executive Order 12866 and does not
require an assessment of potential costs
and benefits under section 6(a)(3) of that
order. It has been exempted from review
by the Office of Management and
Budget under that order. It is not
significant under the regulatory policies
and procedures of the Department of
Transportation (DOT) (44 FR 11040;
February 26, 1979). The Coast Guard
expects the economic impact of this rule
to be so minimal that a full Regulatory
Evaluation, under paragraph 10e of the
regulatory policies and procedures of
DOT is unnecessary. This conclusion is
based on the fact that this rule will not
prevent mariners from passing through
the Beach Thorofare Bridge nor will it
change the present opening schedule.