Our auditors gave the opinion that advertisements in our event journals are a completely tax-deductible donation by those who purchase them. This seems to go against the information that I have read. Does anyone have any more detailed information on what the IRS considers a "charitable contribution" or cite references to authority on the subject? Might the fact that the event journal is not a publication that is mailed to a larger audience mean that the advertisements have no real benefit?

 Thank you for your opinions,

Michael MacKenzie

God's Love We Deliver

It is not about what they consider a charitable donation it is about what they consider a benefit.  If you go to www.fundsvcs.org there is a document in the download section that describes what the IRS considers advertising and typically what donors put into an event program is not real advertisement based on the IRS definition.  I believe it would have to contain pricing information, sale info, etc. to be a real ad.  Just a logo and message is not an ad.

If it were a real ad you would have to issue a QPQ (quid pro quo) receipt and only if paid more than the value would there be any charitable portion.

Thank you, that article was just what I've been looking for. So our event journal does not meet the definition of "periodical" for IRS purposes and our journal "advertising" is really event "sponsorship" so no benefits attach. That makes life much easier.

I would be careful about what the sponsors put into the ads but usually there is no problem.