FundSvcs Community

Dana, I often address this dilemma in my IRS presentations. To my knowledge, the IRS has not issued a clear policy on the matter. 

However, 20+ years ago, I co-presented at a CASE conference in DC with the then-head of the IRS's tax-exempt division. During a sidebar conversation, he offered three possible solutions and suggested that the best approach was an institutional decision. Below is a screenshot of the slide I use to explain his suggestion. In my opinion, the ideal solution is the first. Treat these monthly payments as a single annual contribution and issue only one receipt at the end of the year, properly reflecting the QPQ.

Like John said, there is no clear guidance from the IRS on this issue. One way to approach it is to base the premiums on the annual contribution amount, but to include a sentence in the receipt:

As long as your annual contribution exceeds $X, you may disregard the value of our gift to you in determining tax deductibility. Otherwise, the value of our gift is not tax deductible. See below for the value of the gifts. Then provide a table (if you have enough premia to warrant).

This fulfills your QPQ receipting obligations. The donor's onus is to determine their legal deduction. I've see very large direct response orgs in the advocacy and faith-based spaces use this approach.