Cross References
- Payne, T.C. Summary Opinion 2013-64, August 13, 2013

Under the recordkeeping requirements for charitable contributions, a deduction for a cash donation of $250 or more requires a written acknowledgement from the charitable organization showing:
- Date and amount of contribution,
- Whether any goods or services other than intangible religious benefits were provided by the organization (including a good faith estimate of the value), and
- A statement that the only benefit the taxpayer received was an intangible religious benefit (if applicable).

During the years in question, Margaret Payne was employed by the IRS as a revenue agent in the Manhattan office in New York. She had worked as a revenue agent for 20 years and had been employed by the IRS for 28 years. She graduated from college with two majors and a minor in accounting, finance, and economics, and had completed some graduate work in forensic accounting. She also passed some parts of the CPA exam and at the time of her Tax Court case trial was working at passing the remaining parts.

Margaret Payne claimed that she made cash contributions to the Living Stone Baptist Church (LSBC) in Brooklyn, New York. Lemuel M. Mobley was the pastor of the church at the time of the Tax Court case trial. The church had approximately 50 to 75 members. Pastor Mobley knew all the members by name and face. At the end of the year, LSBC provided a letter to each congregant, upon request, reflecting the congregant’s annual contributions. LSBC required the congregant to personally pick up his or her letter and to sign for it to acknowledge that he or she received a letter reflecting annual contributions.

Another member of LSBC, Juanita Stevenson, worked as a secretary for the IRS in the same Manhattan office building as Margaret Payne. Although they knew each other and were friends, they worked in different sections at the IRS at the time of the Tax Court case trial.

Margaret Payne timely filed her 2008 and 2009 federal income tax returns as Married Filing Separately. She claimed a deduction for charitable contributions of $12,025 for 2008 and $25,140 for 2009. Margaret, who worked for the IRS as a revenue agent, found her own tax return the subject of an IRS audit. Upon completion of the audit, the IRS disallowed $6,047 of charitable contributions for 2008 and $14,000 of charitable contributions for 2009.

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