This message will be of interest mainly to development officers.

On August 3, the IRS issued proposed regulations on the "quid pro quo
gifts" provisions of the 1993 tax law, which requires recipients of gifts
in excess of $75 to notify donors of the value of goods or services
rendered in return for the gifts.  This provision raised many questions
in the nonprofit community, which the IRS has attempted to answer with
these proposed regs.

For a copy of the regs, you can try to find IRS or the Federal Register
on-line, or you can contact me at the address below and I can send you a
copy (hard copy, that is).  The main points of the regs are:

1)  frequently used membership benefits, such as free admission or gift
shop discounts, which are given to donors of less than $75, do not have
to be valued and disclosed to donors of more than $75.

2)  these benefits may also be disregarded when provided to a corporate
donor's employees.

3)  other benefits provided to corporate donor's employees may simply be
described rather than precisely valued.

4)  donors may rely on donee estimates of value, unless they know or
have reason to know that the estimate is unreasonable.

5)  goods or services that are not available on a commercial basis --
such as allowing major donor to hold a reception at the museum -- may be
valued by comparing with similar commercial services.  For example, the
reception room can be valued at the same level as a hotel facility room,
even though the hotel doesn't have exhibitions.

6)  A celebrity presence does not render the good or service dissimilar
or incomparable.  For example, if a major donor gets to have dinner and a
tour with a major artist, the value is simply that of the dinner and the
cost (if any) of a docented tour.  The fact that a celebrity rather than
the regular docent conducted the tour is irrelevant.


Please let me know if you have any questions or comments.

Andy Finch
AAM Government Affairs
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202-289-9125
FAX 202-289-6578