I understand where your logic is coming from on this but it is based on something that is not an actual real life situation. The IRS does not recognize a sole proprietorship reported on Schedule C as an entity of its own. It is one and the same as the taxpayer in their eyes. There is nothing that says a taxpayer even has to have a separate checking account for his Schedule C business. The taxpayer would not include charitable contributions on his Schedule C no matter which checking account he paid them from, and they would never be deducted as a business expense. They would be reported on his personal Schedule A (if he itemized) whether or not he had a Schedule C business.