What to do when a charitable donation is received for government offices (county extension districts are technically government offices):
1. Fill out the Charitable Contribution Letter documenting the donation from donor.
The charitable contribution letter serves only as an acknowledgement that a district received a contribution. The letter states that the “use of deductibility” is at the donor’s discretion. The letter only confirms that a contribution was made. Secondly, this letter or information does not replace the need for 501(c)3 deductibility that may be required by a grantor or donor. The charitable contributions information may play a leading role in a capital campaign or for program donors whereby the need for a 501(c)3 is not necessary.
2. Request Government Information letter from the IRS.
Government entities are frequently asked to provide a tax exempt number or determination letter to prove their status as a tax-exempt or charitable entity. For example, applications for grant funding generally require this information and donors frequently ask for it as substantiation that their contribution is tax-deductible. Government entities are unique from non-profit organizations. While a non-profit requires a determination letter from the IRS to secure tax-exempt status, a government entity does not.
However, as a service to government entities, the IRS will issue a governmental information letter. Letter 4076C, is titled Information Letter - Federal Tax Status of Governmental Entity. Letter 4076C is available to government entities free of charge. Letter 4076C summarizes the law regarding the tax-exempt status of state and local governments under Internal Revenue Code section 170(c)(1). The letter provides the reader general information under Internal Revenue Code section 115(1) regarding the federal income tax status of an entity that performs essential government services and explains the conditions that must be met for governmental organizations to qualify for federal income tax exemption under Internal Revenue Code section 501(c)(3). And finally, the letter cites the form required to apply for a determination that the organization is exempt from federal income tax and charitable contributions made to it are tax deductible.
To obtain a Letter 4076C, Governmental Information Letter, call the IRS Tax Exempt and Government Entities customer assistance line at 1-877-829-5500. You'll need to provide the employer identification number, or EIN of the entity, along with its name and address exactly as it appears on IRS records.
- The person calling must file Form 8821 prior to calling the IRS.
- Tax Information Authorization IRS Form 8821 authorizes them as a hired or elected employee of the entity and legally authorized to receive the letter.
- This form is only valid for three years and must be re-filed. If you have a staff or officer change, a new form must be filed.
For further information, view this video explaining in depth the Government Information Letter as it pertains to a charitable contribution to government offices; unique from non-profit organizations.
Other resources:
IRS Website for Government Information Letter
Example of Government Information Letter - Johnson County
Tax Deductibility Opinion Letter, Whitfield and Eddy