REVENUE MEMORANDUM CIRCULAR NO. 86-2014 issued on December 5, 2014 clarifies the valuation of contributions or gifts actually paid or made in computing taxable income, as part of substantiation requirement under Revenue Regulations (RR) No. 13-98.

        The information required in Section 8 of RR No. 13-98 shall be stated in Certificate of Donation (BIR Form 2322) following the format prescribed in Annex A of the Circular.

        The first page of BIR Form 2322 is a certification by the donee that it has received on the date indicated the subject matter (i.e. cash or property) of the donation. It also provides a description of the properties donated. The donee certification must be signed by an authorized representative of the donee organization.

        The second page of BIR Form 2322 requires the donor to execute a statement which provides the descriptions, acquisition costs and net book values of the properties donated, as reflected in the financial statements of the donor. Moreover, the statement must be accompanied by the deed of sale/bill of sale to prove the acquisition cost of the properties. The values declared by the donor in the statement shall still be subject to further confirmation by the BIR as to its correctness and accuracy. The donor’s statement must be signed by the donor or authorized representative.

        Under Section 235 of the National Internal Revenue Code of 1997, as amended, any provision of existing general or special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organizations or grantees of tax incentives shall be subject to examination by the BIR for purposes of ascertaining compliance with the conditions under which they have been granted exemptions or tax incentives, and their tax liability, if any.

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