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 2006-61 indicates the charitable federal midterm rate under section 7520 for December is 5.8%; up 0.2% from the November rate of 5.6% and unchanged from the October rate of 5.8%.  MORE »

The IRS has announced procedures that will enable 509(a)(3) supporting organizations to seek reclassification to section 509(a)(1) or (2) and thereby qualify to receive qualified charitable distributions from IRAs as provided by the Pension Protection Act of 2006.  MORE »

Kevin Fromer, Treasury assistant secretary for legislative affairs, in response to an inquiry from a constituent of Sen. George Allen, R-Va., has clarified the tax treatment and reporting obligations of IRA trustees when charitable contributions are made directly from an IRA. Treasury has advised that although the plan administator will properly report charitable distributions on Form 1099-R, there will be a procedure on the 2006 Form 1040 for taxpayers who are eligible under the new PPA provision to exclude such amounts from their income.  MORE »

In a legal memorandum published earlier this week, the IRS concluded that a partial transfer of a decedent's IRA to charities in satisfaction of a pecuniary bequest via the decedent's trust results in gross income to the estate and fails to qualify for an offsetting charitable deduction. Writing for Leimberg Information Services, UMKC law professor Christopher R. Hoyt takes issue with the IRS's position arguing it could result in double income taxation.  MORE »

Edmund Harvey of Teeters Harvey & Gilboy LLP has asked Treasury for guidance on whether a new IRA charitable rollover may be used to satisfy a preexisting pledge or if doing so would be considered a prohibited transaction involving self-dealing.  MORE »

The Service has ruled privately that a private foundation's proposed set-aside of income for a scholarship program that will administered by an unrelated public charity will be a qualifying distribution under section 4942(g)(2)(B)(i).  MORE »

The Service has ruled privately that proposed grants from a private foundation to a public organization that employs the son-in-law of the private foundation's founder will not result in self-dealing under section 4941.  MORE »

In a legal memorandum, the IRS has advised that a partial assignment of a decedent's IRA by a revocable trust that is named its beneficiary to charities in satisfaction of pecuniary legacies results in gross income to the trust under section 691(a)(2). Further, because the trust does not require the payment of such amounts from gross income, the trust is not entitled to a deduction under section 642(c)(1) for such assignments.  MORE »

In response to public comments, the Treasury Department has updated "Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities" to help charities avoiding exploitation by terrorist organizations.  MORE »

The Internal Revenue Service has issued the 2007 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning Jan. 1, 2007, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) driven in service to a charitable organizationwill be 14 cents.  MORE »

Kevin Fromer, Treasury assistant secretary for legislative affairs, has responded to questions from a constituent of Sen. Jon Kyl, R-Ariz., who requested clarification of the term "qualified appraiser" and other issues in the new pension reform law that relate to appraisers and overstatements of valuations of property.  MORE »

John Huffaker has requested clarification on whether a "support organization" established to raise and hold funds for a university is able to receive direct transfers from IRAs under the Pension Protection Act of 2006.  MORE »