Auction Receipt Checklist for U.S. Auctions

Disclaimer: This blog does not constitute legal advice. For complete details, refer to IRS Charitable contributions: Written acknowledgments, IRS Quid pro quo contributions, and The Dos and Don'ts for Charity Auctions (A. Michael Gellman, CPA, CGMA).

Charity auctions in the United States have specific IRS requirements for written acknowledgements, the formal term for donation receipts. Without a compliant receipt, donors cannot claim their tax deductions. According to CharityAuctions.com platform data, more than 50,000 organizations have used CharityAuctions since 2007. Use this checklist to ensure your auction receipts meet IRS requirements for both item donors and item winners. For Canadian requirements, see the Canadian auction receipt checklist.

Before You Send Out Your Auction Tax Receipts…

Don't forget to check if you're required to collect sales tax on auction items.

Many areas count auction transactions as a sale, even for nonprofit auctions. They require you to withhold the proper amount from the final bid and send the taxes to your tax authority.

Check your state, city, or county laws for specific sales tax rules.

How to Determine the FMV of Auction Items & Experiences

For receipts for item winners, you'll need to provide the FMV (Fair Market Value) of the item or experience. FMV is the price the item would sell for on the market.

Sometimes determining FMV is not straightforward.

If there is a comparable item or service

Use it for a good faith estimate. For example, a craft session with a school art teacher can be estimated by the price of a similar craft class for kids.

If there is no comparable

For example, a Principal for a Day experience. There is no FMV. Your donor cannot receive a tax deduction for that item.

Auction Receipt Checklist

Download: Auction Receipt Checklist - US

The IRS has different requirements for receipts to donors who donate items for auctioning and for donors who win items from bidding.

Item Donor Receipt Checklist

For all item contributions valued at $250+, send a written acknowledgement that includes:

Include

• Your organization's name
• Your tax ID
• Date of the contribution
• The donor's name
• Description of the donated item/experience
• Statement that "No goods or services were provided by the organization in return for the contribution."

Do NOT include

• Value (FMV) of the item/experience
• Statement that their contribution is tax deductible

The donor is responsible for reporting the value of their contribution and for determining whether the item is tax deductible.

Item Winner Receipt Checklist

When a donor wins an item, it's considered a quid pro quo transaction. The IRS defines this as "a payment a donor makes to a charity partly as a contribution and partly for goods or services."

A written acknowledgement must be given for quid pro quo transactions above $75 (but it's best practice to send a receipt for every donation).

For all winning bids above $75, send a written acknowledgement that includes:

Include

• Your organization's name
• Your tax ID
• Date of the contribution
• The donor's name
• Name of the item/experience
• Good faith estimate of the FMV (Fair Market Value) of the item/experience
• Amount paid for the item/experience
• Disclosure statement: "The amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity."

Do NOT include

• Other advice on tax deductions

Note: The donor only receives a tax deduction for the amount paid over the FMV.

For more on auction reporting, see Auction reports and data exports.

Create your auction or talk to our team to get started. CharityAuctions can automatically email compliant tax receipts for your donors. For post-event follow-up templates, see post auction follow up. For a full platform overview, see silent auction software. For a complete event planning guide, see how to run a charity auction.

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This checklist is maintained by CharityAuctions and is for informational purposes only. For IRS guidance, refer to the official links in the disclaimer above. Questions about your auction? Talk to our team.