The Conrad N. Hilton Foundation has announced that its Chairman, Barron Hilton, is building on the philanthropic legacy of his father by contributing approximately $1.2 billion of proceeds from the sale of Hilton Hotels Corporation and the pending sale of Harrah's Entertainment into a charitable remainder unitrust that will eventually benefit the foundation. Barron Hilton further indicated he plans to ultimately donate 97% of his entire net worth to the foundation on a testamentary basis.  MORE »

The IRS has issued transitional relief and filing procedures for certain charitable trusts that fail the responsiveness test for Type III supporting organizations. The procedures are intended for charitable trusts that received a determination recognizing their tax-exempt status under section 501(c)(3) and that met the requirements of section 509(a)(3) until August 17, 2007, and non-exempt charitable trusts described in section 4947(a)(1), that are treated for certain purposes as organizations described in section 501(c)(3), and that met the requirements of section 509(a)(3) until August 17, 2007.  MORE »

The IRS has announced the release of a redesigned Form 990, Return of Organization Exempt from Income Tax, the form that most public charities and other tax-exempt organizations are required to file annually. The 2008 Form 990 and background materials about the Form 990 redesign are available on the IRS Charities and Nonprofits Web site. The new form will be used for the 2008 tax year starting in 2009.  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 2008-4 indicates the applicable federal rate under section 7520 for January 2008 is 4.4%; down 0.6% from the December 2007 rate of 5.0% and down 0.8% from the November rate of 5.2%. In addition, the deemed rate of return for transfers during 2008 to pooled income funds that have been in existence for less than three taxable years is 4.8%.  MORE »

Following Wednesday's 352 to 64 House vote to pass the Senate amended Alternative Minimum Tax patch without offsetting tax increases, the IRS has announced it will immediately begin the final reprogramming steps for its income-tax processing systems to prepare for the upcoming tax season, and provide the tax professional and software communities with revised copies of the 12 tax forms impacted by the AMT legislation.  MORE »

The Tax Court has upheld the IRS' denial of income tax charitable contribution deductions claimed over a series of years by three related couples for contributions of family limited partnership interests that were funded with interests in the family-owned C-corporation based on the fact the couples failed to satisfy the substantiation requirements of Section 170. Although the couples filed timely tax returns, they were not accompanied by qualified appraisals and Form 8283 was improperly or incompletely prepared. The court further denied business losses for dog breeding, cutting horse, and dairy activities because the petitioners failed to establish the requisite profit motive of Section 183.  MORE »

The Service has ruled privately that a contribution of publicly-traded stock by an individual who is the largest shareholder of the company to a private foundation, followed by the redemption of the stock for fair market value by the company, both during and after the donor's lifetime, will not constitute a prohibited act of self-dealing between the foundation and the company.  MORE »

Given the attention that the Alternative Minimum Tax (AMT) is garnering right now in the media and on Capitol Hill, Gerald Prante, Senior Economist at The Tax Foundation, a nonpartisan tax research group based in Washington, D.C., offers some hypothetical examples of families whose tax liabilities would change if the AMT were "patched," i.e., if the exemption amount were increased for 2007.  MORE »

On November 13, 2007, Treasury issued final regulations that require certain large corporations, S corporations, large exempt organizations, and certain private foundations and section 4947(a)(1) trusts to file their tax returns on magnetic media. Treasury has now issued corrections to those regulations.  MORE »

The Sixth Circuit Court of Appeals has affirmed the Tax Court's holding that a married couple who created business and charitable trusts that lacked economic substance did so fraudulently and were therefore liable for income taxes, self-employment taxes, and civil and accuracy-related penalties.  MORE »

In a new private letter ruling that mirrors a series a prior rulings, the Service has ruled that a sale of shares by an educational institution from its endowment fund to charitable remainder trusts for which it serves as trustee, the making or receipt of payments with respect to the shares, and the holding or redemption of the shares, will not generate unrelated business taxable income to the trusts.  MORE »

The Congress has passed a bill that would exclude from gross income payments from the Hokie Spirit Memorial Fund to the victims of the tragic event at Virginia Polytechnic Institute & State University. The bill was presented to President Bush on December 11.  MORE »

The Tax Court has held that a married couple who created business and charitable trusts that lacked economic substance did so fraudulently and were therefore liable for income taxes, self-employment taxes, and civil and accuracy-related penalties.  MORE »

The Seventh Circuit Court of Appeals has affirmed the Tax Court's denial of an estate tax charitable deduction based on the fact the estate failed to properly reform a defective charitable remainder unitrust via a timely judicial modification and despite the estate's argument that it made a good faith effort to substantially comply with the law. This case provides a good lesson in the remedies available to improperly drafted testamentary CRTs and how "not" to apply them.  MORE »

The IRS has announced optional standard mileage rates for employees, self-employed individuals, or other taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. The rate for miles driven in service to charitable organizations remains unchanged from the 2007 rate of 14 cents per mile.  MORE »

The Tax Court has upheld the IRS's denial of an estate tax charitable deduction for a testamentary charitable remainder unitrust on the grounds that although the estate attempted to reform the trust by amendment, the defect did not constitute a "reformable interest." The only remaining remedy, therefore, was for the estate to commence a judicial proceeding to change the interest into a "qualified interest" within 90 days after the last date (including extensions) for filing the estate tax return, which it failed to do.  MORE »