There were two big changes to tax laws affecting nonprofits sure to spread some cheer. They were part of a year-end appropriations act signed into law on December 20, 2019. Repeal of the “Parking Tax” The first change is a repeal of the nonsensical and unpopular tax on qualified...
The following are some of the highlights from Day One of the WCTEO 2019. Washington Update Sunita Lough (IRS, Deputy Commissioner for Services and Enforcement and former commissioner of the Tax Exempt and Government Entities division) discussed the IRS’s shift to enforcement with better data analytics (to select the...
The IRS Tax Exempt & Governmental Entities (TE/GE) division released its Fiscal Year 2020 Program Letter earlier this week. In the Program Letter, TE/GE Commissioner Tammy Ripperda explains: Each year, TE/GE works hard to deliver the best possible tax administration. It’s what we’re paid to do and what the...
We have recently seen an increasing number of transactions involving the sale of charitable assets to for-profit entities. While generally permissible if conducted properly, these sales raise a number of legal issues at both the federal and state levels that must be considered. Where the transaction is motivated in...
Earlier this week, I had the privilege of guest lecturing to Scott Curran‘s Lawyers as Social Innovators class at Chicago-Kent College of Law at the Illinois Institute of Technology. The following is an excerpt of my notes for the class: Nonprofit Scandals Heard any juicy stories this summer? MIT Media Lab...
The IRS and Treasury are taking another shot at providing an exception for 501(c)(4), 501(c)(5), 501(c)(6), and certain other tax-exempt organizations (notably excluding 501(c)(3) organizations) from the requirement to report the names and addresses of their contributors on Schedule B of Form 990, prompting concerns of more dark money...
The Rebuttable Presumption of Reasonableness procedures, described in Treasury Regulation Section 53.4958-6(a), were promulgated to help charities avoid overpaying certain individuals and entities (known as disqualified persons) that might be able to exercise influence on the charity’s decision-making. Among those included as disqualified persons (DQPs) are: Directors (board members),...
On July 30, 2019, in Bullock vs. Internal Revenue Service, a federal court held unlawful and set aside Rev. Proc. 2018-38 as adopted by the IRS without complying with applicable notice-and-comment procedures. Rev. Proc. 2018-38 provided that tax-exempt organizations described by section 501(c), other than section 501(c)(3) organizations, will no...
In July 2016, we published a post on the New IRS Notification Requirement for 501(c)(4) Organizations – Form 8976. At the time, the IRS issued final and temporary regulations and published Revenue Procedure 2016-41 relating to the requirement that organizations notify the IRS of their intent to operate under section 501(c)(4) of the...
Earlier this year, the IRS released Rev. Proc. 2019-22, effective as of May 28, 2019, which provides a private school may use its Internet website to publicize the school’s racially nondiscriminatory policy as to students and meet the requirements of exemption under Section 501(c)(3). Background In 1970, the IRS...