What wording should a QCD acknowledgment include to satisfy IRS scrutiny?
Executive summary
A Qualified Charitable Distribution (QCD) acknowledgment must be a contemporaneous written statement that identifies the charity, the date and amount of the gift, and explicitly states whether any goods or services were provided in exchange — language the IRS and nonprofit practitioners say is essential to substantiate a QCD for tax reporting and to avoid recharacterization as taxable income [1] [2] [3]. Charities often use simple, direct templates (e.g., “no goods or services were provided”) and may additionally note the check came from the IRA custodian and that the gift is not to a donor‑advised fund — details the guidance and sector examples recommend to reduce audit risk [4] [5] [6].
1. What the IRS and sector guidance actually require
IRS substantiation rules demand a contemporaneous written acknowledgment for substantial gifts that documents the amount, date and the organization receiving the gift; Publication 526 and related IRS guidance frame these substantiation rules that apply to QCD‑related acknowledgments [1]. Practitioners and trust/advisor writeups emphasize that, even though a QCD is a nontaxable IRA distribution if done correctly, the charity’s written acknowledgment must still show the receipt details and whether anything of value was provided in exchange — omission risks denial or reclassification [2] [6].
2. The non‑negotiable elements every QCD acknowledgement should include
The acknowledgment should state the organization’s name, the exact amount received, and the date the charity received the funds; IRS and nonprofit sources repeatedly cite those items as necessary for a contemporaneous written acknowledgment [2] [7]. It must also clearly state that no goods or services were provided in exchange for the gift — that explicit phraseology appears across IRS‑directed guidance and multiple nonprofit templates as the critical assertion that preserves the QCD’s character [3] [1] [8].
3. Helpful, risk‑reducing additional language
Nonprofit guidance and real world forms recommend stating that the funds were received from the IRA custodian or trustee (not the donor personally) and that the gift was not placed into a donor‑advised fund, supporting organization or private foundation — wording that flags compliance with QCD source and recipient rules and helps an accountant or auditor interpret the transaction correctly [6] [4] [5]. Sector pieces also advise describing the gift as a check from the IRA custodian and excluding the amount from charitable deduction totals on Schedule A, since a QCD is typically excluded from charitable deduction treatment [6] [7].
4. Practical template that aligns with IRS expectations
Multiple charities’ QCD forms and nonprofit advisories use near‑identical phrasing; a practical acknowledgment consistent with the sources would name the charity, state the amount and date received, state the source as the IRA custodian, and include the explicit “no goods or services were provided” sentence — a format shown by examples from the American Red Cross and CDC Foundation and summarized by nonprofit counsel [4] [5] [6]. The IRS publications themselves require contemporaneous written substantiation but do not prescribe exact words, so mirroring sector templates and the “no goods or services” clause is the accepted practice [1] [4].
5. Where common mistakes and audit triggers appear
Advisors and trust firms warn that omitting the “no goods or services” language, failing to identify the check as coming from the IRA custodian, or allowing the transfer into donor‑advised funds/supporting organizations can prompt the IRS to deny QCD treatment and force taxable income recognition for the donor — recent practitioner alerts and tax commentaries highlight strict court interpretations of substantiation rules [2] [6]. Charities that send generic thank‑you notes without the contemporaneous acknowledgement details create the biggest risk, according to nonprofit help centers and IRA‑giving guides [7] [9].
6. Bottom line and practical checklist for nonprofits
To satisfy IRS scrutiny, issue a contemporaneous written acknowledgment that: names the charity; states the date received and exact amount; identifies the funds as from the IRA custodian; explicitly states no goods or services were provided in return; and, when relevant, notes the gift was not placed in a donor‑advised fund or supporting organization — language reflected across IRS guidance, nonprofit templates and large charity QCD forms [1] [4] [6] [5]. If an organization’s standard receipt does not include those elements, practitioners recommend custom wording or a short addendum to eliminate ambiguity for the donor’s tax return [2] [7].