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DISCLOSURE REQUIREMENTSindividuals that, if they made a contribution and received a benefit in return, thevalue of that benefit must be subtracted in calculating any charitable contributiondeduction.This matter of adequate disclosure of the extent of deductibility of quid proquo contributions has been a festering and growing problem from the IRS standpoint.Despite an explicit ruling posture on the subject since 1967, 4 many charitableorganizations, either willfully or in ignorance of the IRS’s position, did notadhere to the agency’s requirements in this regard. In this sense, these ruleswere, on occasion, honored in their breach. The problem became so severe thatin 1988 the Commissioner of Internal Revenue, in an unusual development, senta written message to the nation’s charities, saying: “I . . . ask your help in moreaccurately informing taxpayers as to the deductibility of payments by patrons ofyour fund-raising events.” 5 The message announced a Special Emphasis Program,by which the IRS sought to “ascertain the extent to which taxpayers arefurnished accurate and sufficient information concerning the deductibility oftheir contributions.” 6The commissioner’s message focused on fundraising events for which partor all of a payment to a charitable organization is attributable to the purchase ofadmission or some other privilege. In this context, the law (at least as interpretedby the IRS) presumes that the total amount paid is equivalent to the benefitsreceived in return. Of course, this presumption can be rebutted in appropriateinstances, when there is a true gift element in the payment.In general, this matter has three manifestations. One is the fundraisingevent where something of value is provided to the patron, such as dinner orentertainment. The IRS expects the charitable organization to determine thefair market value of the event and to notify the patron that only the amount ofthe payment in excess of that value is deductible as a charitable gift. For example,a fundraising event may center around a dinner; the ticket is $75 and thedinner is worth $50. The IRS expects the charity to tell the patron that only $25of the $75 is deductible as a charitable gift. (The portion that reflects a purchaserather than a gift may be deductible as an ordinary and necessary businessexpense. 7 )In determining fair value, a charitable organization must look to comparablecircumstances. The cost to the charity is not relevant. Thus, a charity may havethe dinner provided to it without cost (such as by a donation from a caterer), yetthe dinner still has a value to the recipient.Another manifestation of this problem occurs when a donor donates andreceives something of value in return, such as a package of greeting cards. 8 TheIRS position in this connection is the same as receipt of a benefit or a privilege:The IRS expects the donor to claim as a charitable deduction only the amount4 See text accompanied by note 2.5 IRS Publication 1391 (1988).6 Id. This Special Emphasis Program is discussed in § 23.1(b).7 IRC § 162(a).8 E.g., Veterans of Foreign Wars, Dep’t of Mich. v. Commissioner, 89 T.C. 7 (1987); Veterans of Foreign Wars,Dep’t of Mo., Inc. v. United States, 85-2 U.S.T.C. 9605 (W.D. Mo. 1984). 606