In a letter sent shortly after the government froze $500 million in Xelan assets, Michael C. Durney, a former Justice Department Deputy Assistant Attorney General for the Tax Division and current litigant in the Xelan matter, wrote Eileen O'Connor, Assistant Attorney General for the Tax Division, that the action was unprecedented and unwarranted.  MORE »

The Service has ruled that the assignment of IRAs and annuity contracts that named a decedent's estate as beneficiary to a 501(c)(3) charity will not cause the estate or any of its beneficiaries to have taxable income or cause the estate to include any amount in its distributable net income.  MORE »

Michael Sanders and Nancy Ortmeyer Kuhn of Powell Goldstein LLP, writing on behalf of Detroit-based Charity Motors, have urged Treasury to issue immediate guidance activating the "direct furtherance" exemption in the new vehicle donation legislation.  MORE »

Ronald Field of Volunteers of America has asked Treasury to consider some of the charity's suggestions pertaining to newly enacted documentation requirements for the vehicle donation program.  MORE »

For purposes of determining the present value of an annuity, an interest for life or a term of years, or a remainder or a reversionary interest, Revenue Ruling 2005-02 indicates the charitable federal midterm rate under section 7520 for January 2005 is 4.6%; up 0.4% from the December and November rates of 4.2%. In addition, the deemed rate under section 642(c)(5) for transfers to new pooled income funds during 2005 is 4.0 percent.  MORE »

Charitable Accord, an umbrella organization working in the interests of charitable organizations on legislative matters, today commented on the current political landscape and where charitable tax reform elements such as the IRA charitable rollover and non-itemizer deduction might fit in the Bush Administration's comprehensive tax reform agenda.  MORE »

On December 10th, the Senate Finance Committee released a legislative discussion draft that would enact new oversight and governance standards for charities, and charged Independent Sector with convening a panel to comment formally on the plan. Today, Charitable Accord, a nonprofit organization that works in the interests of charitable organizations on legislative matters urged interested parties to review the proposal and respond with their comments.  MORE »

In a December 7 letter to Gregory F. Jenner, Treasury acting assistant secretary for tax policy, Donald C. Alexander, former IRS commissioner, discussed the new used car donation rules under section 884, specifically whether new procedures under subsection (f)(12) apply to used car donations in which the claimed value of the car exceeds $500. Alexander believes that the new rules apply if the claimed value on a used car donation exceeds $500, but he recognizes that Treasury will still have some concerns about tax avoidance. Therefore, he suggested that charities receiving a donated vehicle obtain a certificate from the donor saying that the donor would not claim a deduction for the car exceeding its fair market value.  MORE »

The Service has ruled that a public charity's offer to an individual of an deferred annuity contract with payments that will commence on the date of the annuitant's election during a predefined eight year window to not be an unrelated trade or business, and the income the charity earns from investment of the annuity funds will not be unrelated debt-financed income. Because the present value of the annuity will vary depending on the start date, which is not ascertainable when the agreement is created, the donor will assume the highest possible annuity value, thereby claiming the lowest possible income tax charitable deduction.  MORE »

It has been said the two happiest days in the life of a boat owner are the day they buy their pride and joy and the day they sell it. There might be a third--the day they give it away! In this tongue-in-cheek cautionary tale, recovering boat owner and PGDC Editor Marc Hoffman tells a story about one that, to use a related metaphor, unfortunately didn't get away.  MORE »