Some credit card issuers allow cardholders to donate all or some of their cash rewards to a charitable cause.  Discover Card, for example, allows cardholders to donate their Cashback Bonus to one of several charities, and even adds 20% to the amount.  These programs raise the question of whether the donation can be considered tax-deductible by the cardholder. 

While there is no definitive ruling from the IRS on the subject, a 2002 private letter ruling suggests that the IRS would allow a deduction for these donations.

In 2002, the IRS was asked for a private letter ruling about a credit card program in which the cardholder could elect to either receive rebates personally, or direct them to a charity. The IRS concluded that because the decision to donate to charity was an affirmative choice by the cardholder, the rebates just as deductible as if the cardholder took the rebate in cash, and then donated it. See PLR-145990-01.

What is a private letter ruling? A private letter ruling is a written opinon issued by the IRS in response to a request from a taxpayer or their tax adviser. It only applies to the specific taxpayer in question. It cannot be used as legal precedent by other taxpayers or by the IRS. Nonetheless, private letter rulings are useful as indications of how the IRS views a particular tax issue.