Ill. Admin. Code tit. 86 § 1050.350

Current through Register Vol. 49, No. 2, January 10, 2025

Section 1050.350 - [Effective until 5/11/2025] Certificates of Receipt

a)No qualified community foundation shall issue a certificate of receipt for any qualified contribution made by a taxpayer unless that qualified community foundation has been approved to issue certificates of receipt pursuant to Section 1050.300.

b)No qualified community foundation shall issue a certificate of receipt for a contribution made by a taxpayer unless the taxpayer has been issued a contribution authorization certificate by the Department and the qualified community foundation has received a copy of the contribution authorization certificate. The contribution must be made by the person whose name appears on the contribution authorization certificate. If a check or credit card is used to make a contribution, the name that appears on the check or credit card must be the name of the person whose name appears on the contribution authorization certificate. If a contribution is made using stock or negotiable securities, the stock or negotiable securities must be in the name of, or held in the name of, the person whose name appears on the contribution authorization certificate.

EXAMPLE 1 Individual A is the beneficiary of a trust. The trust obtains a contribution authorization certificate from the Department. Individual A instructs the trust to make a contribution to a qualified community foundation in the amount of $1,000. The qualified community foundation must issue the certificate of receipt in the name of the trust.

EXAMPLE 2: Individual A is the beneficiary of a trust. Individual A obtains a contribution authorization certificate from the Department. The trust makes a contribution to a qualified community foundation in the amount of $1,000. The qualified community foundation shall not issue a certificate of receipt to the trust because the contribution authorization certificate is in the name of Individual A. The qualified community foundation shall not issue the certificate of receipt to Individual A because the contribution was made by the trust. The individual must make the contribution to receive the certificate of receipt.

c)If a taxpayer makes a contribution to a qualified community foundation prior to the date by which the authorized contribution shall be made as provided in Section 1050.250, the qualified community foundation shall, within 30 business days after receipt of the contribution authorization certificate, issue to the taxpayer a written certificate of receipt.

d)If a taxpayer fails to make all or a portion of a contribution prior to the date by which such authorized contribution is required to be made, the taxpayer shall not be entitled to a certificate of receipt for that portion of the authorized contribution not made.

EXAMPLE: A contribution authorization certificate in the amount of $1000 is issued by the Department to the taxpayer on April 1. The taxpayer has 10 business days from the date of the contribution authorization certificate to make the authorized contribution. On April 7, the taxpayer sends the contribution authorization certificate and a check in the amount of $500 to the qualified community foundation. The qualified community foundation receives the check on April 9. The qualified community foundation must provide a certificate of receipt to the taxpayer in the amount of $500 no later than May 21 (excluding weekends). On April 16, the taxpayer sends another check in the amount of $250 to the qualified community foundation. The qualified community foundation cannot issue the taxpayer a certificate of receipt for the $250 contribution because the payment was made more than 10 business days after the issuance of the contribution authorization certificate.

e)Each certificate of receipt shall state:

1)the name and address of the issuing qualified community foundation;

2)the taxpayer's name and address;

3) the taxpayer's identification number (SSN or FEIN)

4)the date of each qualified contribution;

5)the amount of each qualified contribution;

6)the total qualified contribution amount; and

7) the unique identifier for the contribution authorization certificate provided to the qualified community foundation for the qualified contribution.

f)Upon issuance of a certificate of receipt, the issuing qualified community foundation shall notify the Department within 10 business days that a certificate of receipts has been issued. The notification shall be made electronically and shall contain the following information:

1)the taxpayer's name and address;

2) the taxpayer's identification number (SSN or FEIN)

3)the date of the issuance of a certificate of receipt;

4) the date and amount of each qualified contribution;

5)the total qualified contribution listed on such certificates;

6)the issuing qualified community foundation's name and address; and

7) the unique identifier for the contribution authorization certificate provided to the qualified community foundation for the qualified contribution.

g)Any portion of a contribution that a taxpayer fails to make by the date indicated on the contribution authorization certificate shall no longer be deducted from the cap prescribed in Section 170-10 of the Act. [35 ILCS 60/170-25 ] (See Section 1050.200.) The Department will restore the amounts previously deducted after the last date has passed by which the qualified community foundation must notify the Department of the issuance of a certificate of receipt for any given contribution authorization certificate.

h) Taxpayers may make, and qualified community foundations may receive, contributions in the form of cash, stocks, and negotiable securities. If a qualified community foundation receives a contribution in stock or negotiable securities, the qualified community foundation must convert the stock and negotiable securities to cash and receive the cash proceeds prior to issuing the certificate of receipt to the taxpayer. The amount of the certificate of receipt issued to the taxpayer shall not exceed the net amount received in cash from the sale and available to the qualified community foundation for awarding grants. If a qualified community foundation maintains a brokerage account dedicated to liquidating and receiving the proceeds from the sale of stock and negotiable securities received from taxpayers as contributions, the funds are received when the proceeds from the sale of the stock or negotiable securities are placed in the dedicated brokerage account. Prior to making a contribution to a qualified community foundation with stock or negotiable securities, the taxpayer must acknowledge that, if the amount received by the qualified community foundation from the sale of the stock or negotiable securities exceeds the amount of the contribution authorization certificate issued to the taxpayer by the Department, the qualified community foundation will issue a certificate of receipt to the taxpayer in the amount of the contribution authorization certificate, the qualified community foundation will be able to use the excess funds for its charitable purposes, and the taxpayer will not receive a tax credit under the Act for the excess funds. The qualified community foundation must notify the taxpayer of the amount that exceeds the contribution authorization certificate.

EXAMPLE 1: A taxpayer has a contribution authorization certificate to contribute $100,000 to a qualified community foundation. The taxpayer owns 100 shares of XYZ stock valued at $95 per share on the day the shares are contributed to the qualified community foundation. The qualified community foundation has 30 business days to issue a certificate of receipt to the taxpayer. On Day 28, the qualified community foundation's broker sells the stock. After deducting a commission, the broker remits $90,000 to the qualified community foundation on Day 29. The qualified community foundation issues a certificate of receipt to the taxpayer in the amount of $90,000 on Day 30.

EXAMPLE 2: A taxpayer has a contribution authorization certificate to contribute $100,000 to a qualified community foundation. The taxpayer owns 100 shares of XYZ stock valued at $95 per share on the day the shares are contributed to the qualified community foundation. The qualified community foundation has 30 business days to issue a certificate of receipt to the taxpayer. On Day 17, the qualified community foundation's broker sells the stock. After deducting a commission, the broker remits $105,000 to the qualified community foundation on Day 19. The amount of the certificate of receipt to be issued by the qualified community foundation to the taxpayer cannot exceed $100,000. The qualified community foundation must notify the taxpayer that it received $5,000 more than the contribution authorization certificate from the sale of the stock, that it will use the excess funds for a charitable purpose, and that the taxpayer will not receive a tax credit under the Act for the excess funds.

EXAMPLE 3: A taxpayer has a contribution authorization certificate to contribute $100,000 to a qualified community foundation. The taxpayer owns 100 shares of XYZ stock valued at $95 per share on the day the shares are contributed to the qualified community foundation. The qualified community foundation has 30 business days to issue a certificate of receipt to the taxpayer. On Day 30, the qualified community foundation's broker sells the stock. After deducting a commission, the broker remits $90,000 to the qualified community foundation on Day 31. The contribution authorization certificate has lapsed, and the qualified community foundation cannot issue a certificate of receipt to the taxpayer for any amount realized from the sale of the stock.

i) If a taxpayer makes a contribution to a qualified community foundation using a credit card and the credit card company charges a processing fee, the qualified community foundation shall issue a certificate of receipt to the taxpayer in the amount of the contribution less the amount of the processing fee. If the qualified community foundation is unable to determine the amount of the processing fee prior to issuing a certificate of receipt to the taxpayer for the contribution, the qualified community foundation may use a reasonable method of allocating processing fees to contributions.

1) The qualified community foundation may collect an amount equal to the processing fee from the taxpayer. If the qualified community foundation collects the amount of the processing fee from the taxpayer, the qualified community foundation may issue the taxpayer a certificate of receipt to the taxpayer in the amount of the contribution received from the taxpayer.

EXAMPLE: The taxpayer has a contribution authorization certificate in the amount of $1,000 and makes a $1,000 contribution using a credit card. The credit card company remits $970 to the qualified community foundation. The taxpayer subsequently pays $30 to the qualified community foundation to cover the processing fee. The qualified community foundation will issue a certificate of receipt indicating the two contributions made in the amount of $970 and $30.

2) The qualified community foundation may issue a certificate of receipt to the taxpayer in the amount of the contribution and treat the processing fee as an administrative expense.

EXAMPLE: The taxpayer has a contribution authorization certificate in the amount of $1,000 and makes a $1,000 contribution using a credit card. The credit card company remits $970 to the qualified community foundation. The qualified community foundation uses 95% of the funds ($950) for making grants and 5% of the funds ($50) for administrative costs. The qualified community foundation pays the $30 processing fee out of the 5% for administrative costs. The qualified community foundation may issue a certificate of receipt to the taxpayer in the amount of $1,000.

j) Without the consent of the taxpayer, a qualified community foundation may not disclose to any person the contents of a taxpayer's contribution authorization certificate, the amount of contributions made by the taxpayer, nor the contents of a certificate of receipt issued to the taxpayer.

k) If a taxpayer rescinds a contribution, the qualified community foundation shall notify the Department within 10 business days, and the certificate of receipt shall be canceled.

Ill. Admin. Code tit. 86, § 1050.350

Emergency rule adopted at 48 Ill. Reg. 18291, effective 12/12/2024, for a maximum of 150 days, exp. 5/11/2025 (Emergency)