The IRS has updated its frequently asked questions for automatic revocation of tax-exempt status for organizations that fail to file annual returns or notice.

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The Tax Court has denied an individual's income tax charitable deductions for cash offering plate donations made to a church based on his failure to substantiate his deductions. Other business-related deductions were denied as well.

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The Tax Court has ruled that a couple is not entitled to an income tax charitable deduction for gifts made to a radio station based on the fact it was not a qualified charitable organization. In order to claim a deduction for a charitable contribution, a taxpayer must establish that a gift was made to a qualified entity organized and operated exclusively for an exempt purpose, no part of the net earnings of which inures to the benefit of any private individual. In this case, the taxpayers failed to do that.

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Writing for Trusts & Estates magazine, attorney David Thayne Leibell reports and discusses the issues associated with a Tennessee Chancery Court's decision to temporarily block the sale by a financially strapped college of a 50 percent interest in an art collection to a Walmart heiress’ new museum.

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Treasury Assistant Secretary (Tax Policy) Michael F. Mundaca has responded to a taxpayer letter forwarded to him by Sen. Harry Reid that suggested that estate appraisals be subject to the same qualified appraisal and appraiser requirements that apply to charitable contributions.  MORE »

The IRS has issued Summertime Tax Tip 2010-21 which includes ten tips for taxpayers making charitable donations and provides links to related IRS publications.  MORE »

A charitable remainder trust can allow business owners to transfer their business to heirs with minimum income and transfer tax exposure, ensure retirement income, and create a permanent legacy. In this article from Family Business Magazine, Barton J. Bradshaw, J.D. explains how.

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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 2010-27 indicates the applicable federal rate under section 7520 for September 2010 is 2.4%; down 0.2% from the August rate of 2.6% and down 0.4% from the July rate of 2.8%.  MORE »

The IRS has ruled privately that a decedent's daughter's disclaimer of her interests in several trusts will constitute a "qualified disclaimer" under IRC section 2518 with the value of the property disclaimed to charity via a limited power of appointment qualifying for an estate tax charitable deduction under IRC section 2055(a)  MORE »

The Joint Committee on Taxation on August 16th released its description of President Obama's fiscal year 2011 budget proposals. The proposals include making permanent and modifying certain tax cuts from 2001 and 2003; temporary recovery measures; tax cuts for individuals, families and businesses, other revenue and loophole closers; upper-income tax provisions; capital investment for inland waterways; and other initiatives.  MORE »

The IRS has revoked the tax-exempt status of an organization based on its finding it was not operated exclusively for exempt purposes because it engaged in the illegal diversion of prizes and proceeds from raffle ticket sales for the personal use of its officers, employees, and/or other private individuals.  MORE »

The Service has ruled privately that an investment trust that invests funds on behalf of a private foundation, the founder of the foundation (who also serves on the investment trust's board of trustees), and other disqualified persons with respect to the foundation, is not a disqualified person with respect to the foundation within the meaning of Section 4946(a)(1), nor do the payments of investment management fees by the foundation to the investment trust constitute a direct or indirect act of self-dealing under section 4941 as long as they are not excessive.   MORE »

In a memorandum opinion, the Tax Court has ruled that even though the IRS prevailed in a matter of estate tax deficiency, the estate will not be held liable for accuracy-related penalties because its executor relied in good faith upon an adviser he hired to provide estate planning advice and prepare income and estate tax returns. Of interest to charitable gift planners is the fact that following the decedent's death the adviser recommended that a charitable trust be created under the premise that amounts transferred to it would qualify for an estate tax charitable deduction. That deduction, however, was denied by the IRS without challenge.  MORE »

Senate Majority Leader Harry Reid (D-NV) has forwarded to Treasury for review correspondence sent to him by a constituent. The constituent, who is a Certified Personal Property Appraiser, recommends that appraisers and appraisals of personal property for federal estate tax purposes meet the same "qualified" appraiser and appraisal requirements applicable to charitable contributions and that any future estate tax reform proposals include such provisions.  MORE »

The IRS has ruled privately that a judicial reformation of a charitable remainder unitrust to omit unintended net income provisions based on a scrivener's error will not cause the trust to fail under section 664 from its date of inception or be considered a prohibited act of self-dealing under section 4941.  MORE »

The Tax Policy Center of the Urban Institute and Brookings Institution has published an analysis of the expiration of the tax cuts enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) that will occur at the end of 2010 unless Congress acts to extend them. The report predicts that if the cuts do expire as scheduled, income taxes will rise sharply for most Americans.

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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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