November 7, 2025
Re: § 58.1-1821 Application: Individual Income Tax
Dear *****:
This will respond to your letter in which you seek correction of the individual income tax assessment issued to you (the “Taxpayers”) for the taxable years ended December 31, 2020, 2021, and 2022.
FACTS
The Taxpayers filed Virginia resident income tax returns for the taxable years at issue, claiming noncash charitable contributions as itemized deductions reportable on federal Schedule A. Under audit, the Department requested documentation to support the deductions. The Taxpayers submitted some documentation, but the auditor determined that it was insufficient to support the claimed deductions and issued assessments accordingly. The Taxpayers submitted an application for correction, asserting that they provided sufficient documentation to support the deductions.
DETERMINATION
Conformity
Virginia Code § 58.1-301 provides, with certain exceptions, that terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC) unless a different meaning is clearly required. Conformity does not extend to terms, concepts, or principles not specifically provided in the Code of Virginia. For individual income tax purposes, Virginia conforms to federal law in that it starts the computation of Virginia taxable income with federal adjusted gross income (FAGI). Income properly included in the FAGI of a Virginia resident is subject to taxation by Virginia, unless it is specifically exempt as a Virginia modification pursuant to Chapter 3 of Title 58.1 of the Code of Virginia.
Generally, the Department relies on the accuracy of information and computations reflected on the federal income tax return when reviewing Virginia individual income tax returns. If the information provided on the federal return appears reasonable, then, typically, the Department does not look behind those computations. The Department, however, may examine and adjust the FAGI and itemized deductions where there is clear evidence that the amounts reported on the federal or Virginia income tax return are inconsistent with the IRC. See Virginia Code § 58.1-219 and § 58.1-310.
Itemized Deductions
Virginia Code § 58.1-322.03 1 allows taxpayers to deduct from their Virginia adjusted gross income certain amounts allowed for itemized deductions for federal income tax purposes. These deductions include charitable contributions, provided they are claimed in accordance with the IRC and its related regulations.
The Department requested that the Taxpayers provide documentation supporting the noncash charitable contribution deductions claimed on their Schedules A for the 2020 through 2022 taxable years. The requests indicated the specific documentation required to substantiate the deductions. Deductions for charitable contributions are allowable only when they can be substantiated through items such as receipts or cancelled checks. See Public Document (P.D.) 19-78 (7/29/2019) and P.D. 23-24 (3/1/2023). Any contribution over $250 must have a contemporaneous written acknowledgment from the donee indicating whether any goods or services were provided by the donee in connection with the contribution, and if so, the value of those goods or services. See Treas. Reg. § 1.170A-13(f)(2).
Under IRS regulations, substantiation requirements for gifts of property other than money vary depending on the amount of the deduction claimed. The regulations set up three tiers of deductions, for amounts up to and including $500, greater than $500 but less than $5,000, and greater than $5,000, and require greater substantiation for each tier. See Treas. Reg. § 1.170A-13. For purposes of determining the applicable threshold values, property and all similar items of property donated to one or more donees are treated as one property. See IRC § 170(f)(11)(F). See also Kunkel v. Comm’r, T.C. Memo 2015-71, and Bass v. Comm’r, T.C. Memo 2023-41.
“Similar items of property” is defined as “property of the same generic category or type, such as clothing, jewelry, furniture, electronic equipment, household appliances, or kitchenware.” See Treas. Reg. § 1.170A-13(c)(7)(iii). For example, if a taxpayer made three separate donations of furniture valued at $2,000 each, the rules applicable to donations greater than $5,000 would apply because the total value of furniture donated during the year exceeded $5,000.
Gifts of Property Valued at $500 and Under
Under Treas. Reg. § 1.170A-13(b)(1), for items valued below $500, a taxpayer need only have a receipt from the donee containing the name and address of the donee, the date and place of the contribution, and a reasonably detailed description of the property donated.
Gifts of Property Valued Over $500
Treas. Reg. § 1.170A-13(b)(3) provides that in addition to the receipt required by Treas. Reg. § 1.170A-13(b)(1), the donation of noncash property with a value between $500 and $5,000 necessitates a written record of the manner and approximate date of acquisition and the cost basis. In addition, taxpayers must complete and attach one or more federal Forms 8283, Noncash Charitable Contributions, to their federal income tax return for each taxable year in which they make a noncash charitable contribution in excess of $500.
Gifts of Property Valued Over $5,000
Under Treas. Reg. § 1.170A-13(c)(2), if a taxpayer claims a deduction for a property valued in excess of $5,000, the taxpayer generally must also obtain a qualified appraisal and attach an appraisal summary to their return.
In each of the taxable years 2020, 2021, and 2022, the Taxpayers claimed deductions for donations of clothing, toys, holiday decorations, furniture, electronics, and housewares. The donations of clothing in 2020 and furniture in 2022 exceeded the $5,000 threshold. While it is unclear which threshold applied to the remaining donations, it is likely that these categories of donations also exceeded the $5,000 threshold because the receipts simply listed generic categories to which the items belonged. As stated above, any category of donation valued at over $5,000 must include a qualified appraisal.
In addition, although the Taxpayers completed federal Forms 8283, they did not attach any appraisals or provide any underlying evidence establishing the value of the donations reported on the forms. Mere statements on a Form 8283 without underlying documentation in support are insufficient to substantiate the deductions. See P.D. 24-68 (7/9/2024) and P.D. 25-36 (3/14/2025). The Forms 8283 provided tend to describe the donated property only in general terms without separating the property and indicating its value by category.
On most of the Forms 8283 provided, the aggregate value of all the property categories listed was well over $5,000 but values were not provided per category. This suggests that most, if not all, of the separate categories aggregated on the forms were valued at over $5,000 as well and in need of a qualified appraisal. However, even if the Taxpayers had been able to separate and value the property by category and show that at least some of the categories did not exceed $5,000, the Taxpayers did not provide itemized listings of the property donated and the receipts were not sufficiently detailed to support the claimed valuations.
CONCLUSION
Taxpayers must maintain records sufficient to allow the IRS to determine their correct tax liability. See Treas. Reg. § 1.6001-1(a). Similarly, Virginia Code § 58.1-310 provides:
Whenever in the opinion of the Department it is necessary to examine the federal income returns or any copy thereof of any individual, estate, trust, partnership or corporation in order properly to audit such returns, the Department or the commissioner of the revenue shall have the right to require such taxpayer to provide such return or a copy thereof and all statements, inventories, and schedules in support thereof.
Under the provisions of Virginia Code § 58.1-205, in any proceeding relating to the interpretation of the tax laws of Virginia, an “assessment of a tax by the Department shall be deemed prima facie correct.” As such, the burden of proof is on the Taxpayer to show that the Department’s assessment was erroneous. In this case, the Taxpayers did not provide sufficient documentation to support the deductions claimed for noncash charitable contributions. Accordingly, the Department’s assessments are upheld. The Taxpayers will receive updated bills that will include accrued interest to date. The Taxpayers should remit the balances due within 30 days of the bill dates to avoid the accrual of additional interest and possible collection actions.
The Code of Virginia sections cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this decision, you may contact ***** in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at ***** or *****@tax.virginia.gov.
Sincerely,
James J. Alex
Tax Commissioner
Commonwealth of Virginia
AR 4867.Y