The Service has ruled privately that a nonreversionary grantor charitable lead annuity trust created by a married couple will be a qualified S-corporation shareholder, will qualify for gift tax and income tax charitable deductions, will not be includible in either spouse's estate, and will not violate the excess business holdings rules.  MORE »

Senator Pat Roberts, R-Kan., has introduced S. 2264, which would amend the Internal Revenue Code to extend for two years the tax-free distributions from individual retirement plans for charitable purposes.  MORE »

In a November 10 address to the Philanthropy Roundtable, IRS Commissioner of Tax Exempt Orgs Steven T. Miller discussed the IRS's compliance role in the evolving charitable sector.  MORE »

The Internal Revenue Service has reminded section 501(c)(3) organizations, including charities and churches, that federal law prohibits them from becoming directly or indirectly involved in campaigns of political candidates and has provided references to resources where organizations can review these rules.  MORE »

The Service has approved the reformation, subject to judicial approval, of a testamentary trust that provides both a charitable lead annuity interest to twelve qualified charitable organizations and fixed annuity payments to three individuals. The trust will operate for the shorter of the lives of the three individuals or a fixed term of years with the remainder interest held for the benefit of the twelve charities. The Service ruled the present value of charitable lead interest will qualify for the estate tax charitable deduction under section 2055(a).  MORE »

In a November 19 release, the American Institute of Certified Public Accountants has commended the introduction of S. 2369 by Senate Finance Committee leaders, Chairman Senator Max Baucus of Montana and ranking-minority member Senator Chuck Grassley of Iowa, to prohibit patents on tax planning methods.  MORE »

The full text of S. 2369, introduced by Senate Finance Committee Chair Max Baucus, D-Mont., that would deny patent protection to tax planning inventions is now available. A "tax planning invention" means a plan, strategy, technique, scheme, process, or system that is designed to reduce, minimize, avoid, or defer, or has, when implemented, the effect of reducing, minimizing, avoiding, or deferring, a taxpayer's tax liability or is designed to facilitate compliance with tax laws, but does not include tax preparation software and other tools or systems used solely to prepare tax or information returns.  MORE »

The IRS has released a draft of the 2007 Form 5227, Split-Interest Trust Information Return, required for chariable remainder trusts and charitable lead trusts. The draft form incorporates information formerly reflected in the Form 1041-A; however, it is not yet known if Form 1041-A will be still be required for 2007. A release date for the final form and instructions is targeted for December 24, 2007. Comments should be submitted to the IRS by December 14 to allow proper consideration.  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 2007-70 indicates the charitable federal midterm rate under section 7520 for December 2007 is 5.0%; down 0.2% from the November and October rates of 5.2%.  MORE »

Under current law, IRC section 170(g)(2) provides a $50 monthly charitable deduction for families that host foreign exchange students. The Youth Exchange Support Act of 2007, S. 2252, introduced by Sen. Tim Johnson, (D-S.D.), would increase the amount to $200 and index it for annual for cost-of-living increases.  MORE »

Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Republican Member Chuck Grassley (R-Iowa) have introduced legislation to prohibit the Patent and Trademark Office (PTO) from granting patents for common tax strategies and tax planning inventions. To date, the PTO has granted 60 tax patents, with 99 pending final decisions.  MORE »

The IRS has issued temporary regulations describing the time and manner in which certain tax-exempt organizations not currently required to file an annual information return under section 6033(a)(1) are required to submit an annual electronic notice including certain information required by section 6033(i)(1)(A) through (F).  MORE »

Charitable legal expert Conrad Teitell testified on November 14 before the Senate Finance Committee regarding the uncertainty of the federal estate tax under current law. Within his often-humorous remarks, Teitell recommended that any changes to the estate tax retain the unlimited charitable deduction as provided under current law.  MORE »

The Internal Revenue Service on November 2 warned taxpayers to be on the lookout for a new e-mail scam that appears to be a solicitation from the IRS and the U.S. government for charitable contributions to victims of the recent Southern California wildfires. The scheme seeks to trick recipients into providing personal financial that can be used to steal their assets and may also cause malicious softwared to be downloaded onto the recipient's computer.  MORE »

The Tax Court has ruled an attorney cannot claim an income tax charitable deduction for the donation of photocopied materials received from the Government in defense of Oklahoma City bomber Timothy McVeigh because the attorney did not possess an ownership interest in the materials and was thus incapable of effecting a valid gift of the materials under Oklahoma State law.  MORE »

House Ways and Means Committee Chair Charles B. Rangel, D-N.Y., has announced committee passage of H.R. 3996, the Temporary Tax Relief Act of 2007 that, according to Rangel, would "prevent more than 23 million families from a tax increase under the alternative minimum tax (AMT)." Regarding charitable provisions, the bill would extend tax-free distributions from individual retirement plans for charitable purposes; extend enhanced charitable deductions for contributions of food inventory, computer technology and equipment; and extend the special rule encouraging contributions of capital gain real property for conservation purposes.  MORE »