Donations for 2007 in 2008

I believe I already know the answer to this, but was wondering if there was any possible way to included a donation processed in 2008 on a 2007 tax statement. The member in question gave a donation to the Bishop in December that was mistakenly lost. The re-issue for this was given to the Bishop the first week in January. Ooops. I don't believe there is anything I can do...

BR Highland wrote:I believe I already know the answer to this, but was wondering if there was any possible way to included a donation processed in 2008 on a 2007 tax statement. The member in question gave a donation to the Bishop in December that was mistakenly lost. The re-issue for this was given to the Bishop the first week in January. Ooops. I don't believe there is anything I can do...

There certainly is a way to process 2007 donations in 2008, but only if proper documentation is available to show that the donation was actually made in 2007. Church policy (in conjuction with IRS policy in the US) requires that donations received in 2007 or postmarked in 2007 (even if received in 2008) are counted as 2007 donations. But you should keep the envelope to document the postmark. Even in 2008, MLS will allow you to create a 31 December 2007 donation batch. Donations in such a batch will be included in the year-end tax statement, and the Annual Tithing Report for 2007.

However, in the specific case you mention, it sounds like the donation was made in 2008 (even though it was to replace a lost 2007 donation). I don't see how you can come up with any documentation (such as a postmarked envelope) that would prove to the IRS that it was a 2007 donation. That's certainly disappointing for the donor, particularly if it was the mistake of a bishopric member in losing the donation. You could ask Clerk Support, but I think the rules are pretty strict on these things.

Alan_Brown wrote:Church policy (in conjuction with IRS policy in the US) requires that donations received in 2007 or postmarked in 2007 (even if received in 2008) are counted as 2007 donations. But you should keep the envelope to document the postmark.

In the MLS "tip" sent to all the units in December that discussed the ability to process a donation postmarked in 2007, there was no mention of retaining the postmarked envelope as part of the documentation. (Although now it makes perfect sense.)

I processed a few of these and could have easily retained the postmarked envelope had I known that was a specific requirement. Perhaps next year the Church should provide more of these "details" in their tip.

Mikerowaved wrote:In the MLS "tip" sent to all the units in December that discussed the ability to process a donation postmarked in 2007, there was no mention of retaining the postmarked envelope as part of the documentation. (Although now it makes perfect sense.)

I processed a few of these and could have easily retained the postmarked envelope had I known that was a specific requirement. Perhaps next year the Church should provide more of these "details" in their tip.

It's not a specific requirement, as far as I know. I just thought it was a good idea, just in case anyone got audited.

Alan_Brown wrote:It's not a specific requirement, as far as I know. I just thought it was a good idea, just in case anyone got audited.

It is a requirement that you keep the postmarked envelope as proof that it was a 2007 donation. Sorry that was not included in the tip. We will make that correction the next time we send that tip out.

I have some members whose 12/30 or 31/07 donation was returned NSF, in 2008. When they replace that can it be entered as a 2007 donation? Of course, that's what they'd like to do as it has significant tax consequences for them, but I've told them I'm not sure.

Would appreciate your help.

dyoung wrote:I have some members whose 12/30 or 31/07 donation was returned NSF, in 2008. When they replace that can it be entered as a 2007 donation?

Check the MLS help file. I'm quite certain that can NOT be done.

There was a time when returned checks could be replaced and the original donation stood, but later policy did not give the option and simply said to cancel the donation and inform the member. (Which frankly made things easier on the clerk.)

dyoung wrote:I have some members whose 12/30 or 31/07 donation was returned NSF, in 2008. When they replace that can it be entered as a 2007 donation? Of course, that's what they'd like to do as it has significant tax consequences for them, but I've told them I'm not sure.

Would appreciate your help.

If a donor's check is returned as NSF the donation would be canceled from the deposit (batch date) that it was receipted into. If the donor replaces the check it is treated as a new donation and receipted into the next deposit that is entered into MLS with the current date. So if the donation is replaced in the next calendar year it would not count as a donation for the prior year. In order for a donation to qualify according to IRS as a prior year donation, the bishop or counselor needs to receive it by midnight of December 31 or it needs to be postmarked by December 31 and the funds need to be available when the check is processed at the bank.

Thanks for the crystal clear comments. In addition, don't forget to send out a corrected (and signed) year-end statement to the member if they had been issued already.