Churches or ministries that receive a motor vehicle, boat or airplane contribution in excess of $500, should prepare Copy A of Form 1098-C. The form should be retained and filed with the IRS by February 28, 2008 along with a 1096 transmittal form. The Form 1096 must show the total number and dollar amount of all such 1098C (copy A forms) for the year. Remember, do not combine any of the under $500 donations in the 1098C-copy A totals.
Penalties for failure to provide appropriate documentation to either the donors or the IRS have increased, as have penalties for providing false or fraudulent acknowledgements. All related records must be maintained for at least three years. Be sure your staff is fully aware of these new requirements before accepting any significant non-cash contributions.
You can print copies B, C, and D of Form 1098-C from the IRS Internet website and use these for your recordkeeping, or you may prepare your own acknowledgement forms provided they have all the identical required information. Prior to February 2008, you will need to order the official IRS forms because copy A is a red form and copies of it cannot be scanned into the IRS system. Call us for forms or advice, or call 1-800-829-3676 to request your forms. There are also software and forms providers in the private market.
The current instructions require mailing completed forms 1096 and 1098C (copy A) to Ogden, UT prior to December 31, 2007. Beginning in 2008 you will mail the forms to Kansas City, MO or Austin, TX, depending upon your resident state. Please refer to the Form 1096 Instructions prior to mailing your forms.
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