2009 donations counted in 2010

The bishop wants to count the final 2009 donations he has received (he forgot to bring them to the church last night for the last night of TS) on Saturday January 2nd. Can they still be credited to 2009?

If the bishop received them before the end of the year they can be entered into MLS for the prior year. They will be credited for the 2009 year. See the Receiving a donation dated in the prior year section of the wiki article Prior Year Transactions.

The bishop can't add donations of 2009 in 2010 because, in new year's first time login, MLS will request to "end fiscal year". You can't stop this operation.

MorettiDP wrote:The bishop can't add donations of 2009 in 2010 because, in new year's first time login, MLS will request to "end fiscal year". You can't stop this operation.

You're right that when you first login in 2010 that you will be prompted to close out the fiscal year, and you can't stop that operation.

But even in 2010, it is possible to create a donation batch dated 31 December 2009. You have to comply with the appropriate tax laws (in the US, that means that the donations were received by midnight December 31, or mailed with a 2009 postmark to the bishop), but it can still be done.

MorettiDP wrote:The bishop can't add donations of 2009 in 2010 because, in new year's first time login, MLS will request to "end fiscal year". You can't stop this operation.

Just seconding Alan_Brown's response. You can backdate a donation batch. In fact, as he mentioned, we are supposed to create a batch dated 12-31-2009 for all 2009 donations delivered to the bishopric after the last Sunday batch in 2009 has been completed (hand delivered before 2009 ended or postmarked in 2009).

Supposedly the bishop was finished with tithing settlement, but while I was out of town, (last week of December), he scheduled one more day. Several members made their entire 2009 tithing donation on that day. However, these were all entered in as donations on January 3rd. I know this is going to be an issue with those members. Can I correct that transaction, and move them to 2009? We're talking very large donations. What are my options?

rexgj wrote:Supposedly the bishop was finished with tithing settlement, but while I was out of town, (last week of December), he scheduled one more day. Several members made their entire 2009 tithing donation on that day. However, these were all entered in as donations on January 3rd. I know this is going to be an issue with those members. Can I correct that transaction, and move them to 2009? We're talking very large donations. What are my options?

Those donations, if received by the bishop in 2009, should have been put into a separate batch dated 12/31/2009 (or earlier) and not combined with the donations received in 2010. I'm guessing, however, all were combined into one donation batch last Sunday.

To fix this, I would suggest you first contact clerk support to see/verify how to proceed. It will probably consist of 1) deleting from last Sunday's batch those donations that were received in 2009. 2) Then creating a batch dated 12/31/2009 and add those donations to that batch. 3) Letting them know when this is completed so that you don't get in trouble for not making a drop at the bank. They will have to split the amount of last Sunday's deposit between the two dates.

Am I correct in assuming this (a donation credited to the wrong year) is only an issue if a member gets audited? and if he does get audited, can't we produce his donation slip (dated Dec 2009), and he has his check (dated Dec 2009)? Or is this not the case?

rexgj wrote:Am I correct in assuming this (a donation credited to the wrong year) is only an issue if a member gets audited? and if he does get audited, can't we produce his donation slip (dated Dec 2009), and he has his check (dated Dec 2009)? Or is this not the case?

Sure, it's always only an issue if they get audited. However, the only form the IRS will accept is the Tax Statement printed from MLS (on Church letterhead) and signed by the Bishop. The only way a donation is included on the statement is if it is recorded in MLS in a batch dated in the corresponding year.

If a member itemizes deductions and claims their donations as charitable contributions, then the tax statement is supposed to be submitted along w/ the paperwork and W2s. If the amount on the tax statement does not match the amount claimed in the tax return, they will either decrease the claimed amount, ask for a new form, or audit.

rexgj wrote:Am I correct in assuming this (a donation credited to the wrong year) is only an issue if a member gets audited?

I would discourage that line of reasoning. If the member gets audited and it's found the church improperly handled the donation, it's going to be a big mess for the church.

You'd also be opening the door for the member to make a mistake in their donation for 2010 - or worse, misstate their donations to the IRS.

This simply can't go anywhere good.

Your point is well taken. I agree, these deposits need to be placed in the correct year. Thanks for your help.

Just some feedback. After your responses to my 2009-2010 tithing problem, I walked over to the church and called church finance. The process for correcting the problem is easy and straight forward:
1. Go into the Jan 2010 batch and delete all donations that belonged in Dec 2009.
2. Create a new batch dated Dec 31, 2009, and input those donations that belonged in that year.
3. Do a send and receive. Job is done.

We have one 2009 check that was set aside and failed to make it into the retroactive "31 Dec 2009" batch of such donations that we sent two days ago. My plan has been to put that into a new batch with the same date.

Is that a correct solution? I seem to remember more than one batch per date before.

boomerbubba wrote:We have one 2009 check that was set aside and failed to make it into the retroactive "31 Dec 2009" batch of such donations that we sent two days ago. My plan has been to put that into a new batch with the same date.

Is that a correct solution? I seem to remember more than one batch per date before.

You are correct. You can have more than one batch for any given date.

crislapi wrote:You are correct. You can have more than one batch for any given date.

And if you'd like a reference, see the Record Keeping FAQ, which says on page 35:

Question:
We just closed the donation batch and then received another donation. What should we do?

Answer:
Create a new batch.

crislapi wrote:Sure, it's always only an issue if they get audited. However, the only form the IRS will accept is the Tax Statement printed from MLS (on Church letterhead) and signed by the Bishop. The only way a donation is included on the statement is if it is recorded in MLS in a batch dated in the corresponding year.

If a member itemizes deductions and claims their donations as charitable contributions, then the tax statement is supposed to be submitted along w/ the paperwork and W2s. If the amount on the tax statement does not match the amount claimed in the tax return, they will either decrease the claimed amount, ask for a new form, or audit.

Unless Crislapi is an IRS official, I don't think these statements are valid.

It's my understanding that the official bishop signed statement is not the only documentation that the IRS will accept (unless things have changed for 2009). According to statements I have received from my stake financial clerk (who is a tax attorney) and other church officials, the yellow copy of the donation slip and/or a canceled check may be acceptable. It's ultimately up to the auditor.

Also (again, unless something has changed for 2009), the tax statement is not normally submitted with one's tax return.

That being said; however, the church takes a conservative approach to these things and does not issue any statements on what is considered a charitable donation except for the official bishop signed statements (or similar statements from CHQ if paid in kind). If an individual wants to claim anything other than this on their tax return, they should consult with their tax adviser.

Of course, the intent of Crislapi's response is good. the donation batch should be corrected so that the tax statements are accurate.

Greggo wrote:Unless Crislapi is an IRS official, I don't think these statements are valid.

It's my understanding that the official bishop signed statement is not the only documentation that the IRS will accept (unless things have changed for 2009). According to statements I have received from my stake financial clerk (who is a tax attorney) and other church officials, the yellow copy of the donation slip and/or a canceled check may be acceptable. It's ultimately up to the auditor.

I can't say what an auditor might ultimately accept but according to http://www.irs.gov/publications/p526/ar ... 1000229831 any cash donation of $250 or more needs a written acknowledgment from the receiving organization (although it does list special rules for payroll deductions). For smaller donations other records are acceptable.

Of course, anybody who has questions should read the IRS documentation themselves and/or consult a tax attorney or accountant (of which I'm neither). But obviously the church has an obligation to provide accurate acknowledgments if they want members to be able to deduct larger donations without trouble. As I clerk I wouldn't want to be partially responsible for someone getting a tax penalty because a deduction was disallowed in an audit due to faulty documentation.

Greggo wrote:
Also (again, unless something has changed for 2009), the tax statement is not normally submitted with one's tax return.

I am a tax attorney and can verify that the IRS does not require taxpayers to submit the tax statement with their returns. The statement should be retained for audit purposes.

eblood66 wrote:I can't say what an auditor might ultimately accept but according to http://www.irs.gov/publications/p526/ar ... 1000229831 any cash donation of $250 or more needs a written acknowledgment from the receiving organization (although it does list special rules for payroll deductions). For smaller donations other records are acceptable.

Of course, anybody who has questions should read the IRS documentation themselves and/or consult a tax attorney or accountant (of which I'm neither). But obviously the church has an obligation to provide accurate acknowledgments if they want members to be able to deduct larger donations without trouble. As I clerk I wouldn't want to be partially responsible for someone getting a tax penalty because a deduction was disallowed in an audit due to faulty documentation.

The rules changed beginning with US tax year 2007 for both the donor and the Church.

The Church is required to provide documentation for donations and can be penalized for failing to do so.

For charitable contributions of money, regardless of the amount,
the donor must maintain as a record of the contribution a bank record
(such as a cancelled check) or a written record from the charity.
The written record must include the name of the charity, date,
and amount of the contribution.

If the donation is $250 or more, the rule eblood66 mentions applies. The documentation has to have come from the charity.

Obviously, if the member does not itemize deductions, the member does not need any documentation, even though the Church still is required to provide it if the donation is over a certain amount. CHQ says any amount requires the giving of a statement to the member.

And Greggo is correct. The statement is not submitted with the tax return. It is retained by the taxpayer in case there is an audit. But, if there is an audit, the member will need to have it.