Category: IRS

Tax-exempt organizations will soon receive guidance regarding the issues most likely to trigger an examination by the Internal Revenue Service (IRS), says Sunita Lough, Commissioner of the IRS Tax-Exempt and Government Entities Division (TE/GE).  On a recent call discussing TE/GE’s newly released FY 2017 work plan, Ms. Lough indicated that this interim guidance, which will likely come in mid-October, will be designed to provide nonprofits with a better understanding of how the IRS uses information document requests (IDRs) in order to more efficiently resolve compliance issues.

As specified in Notice 2016-09 (discussed in our recent blog post on the PATH Act), the IRS has issued temporary regulations describing new notification procedures and a notification form for certain (current and prospective) Section 501(c)(4) organizations. 

The IRS recently announced that, beginning February 29, 2016, Form 990-N (also known as the “e-Postcard”) will be filed through the IRS website rather than through the Urban Institute website.

On September 18, the Department of the Treasury and Internal Revenue Service (the “IRS”) proposed regulations relating to the substantiation of charitable contributions made to Section 501(c)(3) organizations.  If approved, the proposed regulations would expand the ways in which charities can acknowledge donations.  Under the current regulations, charities must provide a contemporaneous written acknowledgement to donors who contribute $250 or more stating (i) the amount of cash and a description of any property other than cash contributed; (ii) whether any goods or services were provided by the organization in consideration of the contribution; and (iii) a description and good faith estimate of the value of any goods or services provided.  This acknowledgement is routinely provided as part of the “thank you’s” sent out by charities for contributions they receive, including those that fall below the $250 threshold.

The IRS has released final regulations that will impact how U.S. private foundations determine that a foreign charitable organization – i.e., one not organized under U.S. law or recognized as a public charity by the IRS – is the “equivalent” of a U.S. public charity for certain purposes.  This determination is useful in the context of a private foundation’s compliance with the qualifying distribution rules under Section 4942 of the Internal Revenue Code (the “Code”) as well as with the taxable expenditure rules under Section 4945 of the Code.

On June 16, 2015, the White House issued a press release highlighting private sector commitments and a series of executive actions related to investment in clean energy innovation.  The release coincided with yesterday’s clean energy investment summit, at which Vice President Joe Biden described more than $4 billion of independent commitments by major foundations, institutional investors, and other long-term investors to fund climate change solutions, including innovative technologies with the potential to reduce carbon pollution.

The Treasury Department and IRS released the 2014-2015 Priority Guidance Plan on August 26, 2014.  The Guidance Plan lists a total of 317 projects that are priorities for allocation of Treasury Department and IRS resources for July 2014 through June 2015.  Of these, only sixteen relate directly to exempt organizations.  Eleven of the sixteen are carryovers from the 2013-2014 Priority Guidance Plan; the remaining five projects are new, but two of these (dealing with Form 1023-EZ and related streamlined application procedures) were completed before issuance of the 2014-2015 Plan. 

In the past year, the Tax Exempt and Government Entities Division (“TE/GE”) of the Internal Revenue Service (“IRS”) has been engulfed in controversy, resulting in sweeping changes in both its personnel and operations.  The controversy began in May 2013, when Lois Lerner, at the time the Commissioner of TE/GE, revealed at an American Bar Association (“ABA”) Tax Section conference that the IRS had used inappropriate criteria to identify and scrutinize exemption applications from organizations with certain words in their names, such as “Tea Party” and “patriot.”