The Tax Court has ruled that although a partnership successfully challenged the IRS in claiming a charitable contribution deduction for the bargain sale of real property in connection with an eminent domain proceeding, it is not entitled to recover administrative and litigation costs. The decision was based on the court's conclusion that even though the IRS lost on the merits, it had established that its positions were substantially justified at both the administrative and litigation levels because they were sufficiently supported by the facts and circumstances of the case and existing legal precedent.

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The IRS is providing one-time relief to allow small tax-exempt organizations to come back into compliance and retain their tax-exempt status even though they failed to file for three consecutive years. A complete explanation of the types of organizations that qualify for relief, how to comply, FAQs, and links to related documents and resources are provided.

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A free IRS webinar for tax professionals on the Affordable Care Act, originally scheduled for September 9, is to be rescheduled for October.

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Are you an exempt organization administrator, active volunteer or a student considering a career in the nonprofit sector? The IRS will offer its popular workshop for Small and Mid-Sized Organizations in cooperation with Lawrence Technological University in Southfield, MI (Detroit) on September 22 and 23, 2010.

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The Internal Revenue Service has announced the release of proposed regulations that would establish a fee for individuals who apply for a preparer tax identification number (PTIN). The IRS is working to finalize the proposed regulations, which are the first of a series of steps planned to increase oversight of federal tax return preparation.

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The Chronicle on Philanthropy has teamed up with Bolder Giving, an organization that works to encourage philanthropists to give more generously, to develop a series of live online discussions with some of the nation's most interesting philanthropists. A presentation on Wednesday, July 28, at noon U.S. Eastern will interview a married couple of modest means that decided to give away a larger percentage of their income to benefit others.

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A U.S. District Court has denied a married couple's claimed income tax charitable deduction for the donation of a real property structure to a fire department that would by agreement be demolished by the donee in connection with its fire fighting training program. Following the demolition of the structure, the donors would then rebuild a larger structure on the property for their own personal use. In essence, the couple had devised a clever plan to claim a charitable deduction for the destruction of a structure they would otherwise have to pay to demolish. The court denied the couple’s deduction based on the fact the appraisal they provided was not a qualified appraisal and because the couple failed to obtain a contemporaneous written acknowledgment from the charitable donee. Additional issues included whether a deduction would have been available for this type of transaction under the Internal Revenue Code and if the plaintiffs otherwise established they were entitled to a deduction. However, because the couple’s failure to properly substantiate their deduction was dispositive, the Court did not address the remaining issues.

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The IRS has ruled privately that a private foundation's display of artwork, bequeathed to it by its founder, in a shopping center in which the founder had also owned an interest, will not be a prohibited act of self-dealing under Section 4941. Even though the use of the contributed property by a disqualified person in general constitutes an act of self-dealing, the benefits any disqualified person enjoyed in this case were ruled to be incidental or tenuous within the meaning of section 53.4941(d)-2(f)(2) of the regulations and, therefore, excepted from the self-dealing rules.

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The IRS has revoked the tax-exempt status of an organization that loaned a substantial portion of its assets back to the donor who contributed them. The donor effectively used the organization as a private source of loan credit into which he could transfer excess personal funds, claim tax deductions, while he still retained complete control of the funds and used them for purposes unrelated to the organization's exempt purpose. The result was private inurement to the donor and revocation of the organization's tax-exempt status.  MORE »

The Tax Court has denied a couple's income tax charitable deduction and imposed penalties in connection with a contribution of a facade conservation easement based on their failure to obtain a qualified appraisal as required under IRC section 170 and section 1.170A-13(c) of the regulations. The court further denied a deduction for a cash gift made to the conservation organization because it was not a "contribution or gift" under section 170(a); rather, it was made as a quid pro quo in exchange for the organization's assistance in helping the couple secure a tax deduction for the easement.

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H.R. 5699, the Gulf Oil Spill Recovery Act of 2010, introduced by Rep. Jeff Miller, R-Fla., would provide tax benefits for certain areas affected by the discharge of oil by reason of the explosion on, and sinking of, the mobile offshore drilling unit Deepwater Horizon, and for other purposes. Charitable provisions include relief from percentage limitation and excess carryover rules.

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The Congressional Research Service has released a report analyzing tax issues regarding to the BP Deepwater Horizon Gulf of Mexico oil spill and tax relief options; including claims payments, casualty losses, net operating loss carrybacks, employment incentives, IRA distributions, and charitable relief. The report further explores potential economic effects of legislation introduced thus far.  MORE »

The IRS has replied to an inquiry regarding the tax deductibility of charitable contributions made via credit card. Such contributions are deductible in the year made regardless of when the donor subsequently repays the creditor. Substantiation requirements apply.

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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 2010-19 indicates the applicable federal rate under section 7520 for August 2010 is 2.6%; down 0.2% from the July rate of 2.8% and down 0.6% from the June rate of 3.2%.  MORE »

As reported by David Thayne Leibell in Trusts & Estates, Warren Buffett and Bill and Melinda Gates are asking the members of the Forbes 400 to each pledge more than half of their wealth to charity.  MORE »