According to a new article by Barlow Mann of The Sharpe Group, organizations asking their older donors to simply include them in their will may be missing a tremendous opportunity: current gifts of publicly-traded securities and other non-cash assets.  MORE »

Charitable giving in the United States is estimated to be $306.39 billion in 2007, exceeding $300 billion for the first time in history, according to Giving USA 2008, the yearbook on philanthropy released today by Giving USA Foundation.  MORE »

The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Unfortunately, the rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.  MORE »

The Service has denied tax-exempt status under section 501(c)(3) to an organization that is organized to facilitate contributions of real estate donations to colleges and universities on the basis the organization is not organized exclusively for charitable purposes. In addition, the Service ruled that since all of organization's activities constitute the operation of a commercial activity, it is organized and operated for the primary purpose of carrying on an unrelated trade or business.  MORE »

The Service has ruled privately that a private nonoperating foundation's proposed recapitalization of companies bequeathed to it by its founder will be permitted holdings, and its ownership of 100 percent of the stock of a corporation will not be considered excess business holdings because the  corporation is a functionally related business.

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The Service has ruled privately that a proposed distribution of assets from a testamentary trust to two charitable beneficiaries, that could not otherwise resolve a conflict regarding how income would be distributed and pursuant to a court-approved settlement agreement, will qualify for an estate tax charitable deduction.
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The Service has ruled privately that a private operating foundation's establishment of a financial awards program intended to recognize individuals for their past charitable, scientific, educational or literary achievements do not need pre-approval by the Internal Revenue Service, will not be taxable expenditures by the organization, and will be qualifying distributions.  MORE »

The IRS has approved a judicial reformation of a charitable remainder unitrust to correct a drafting error. The trust was drafted inadvertently as a net income makeup unitrust when a standard payout format was intended. The reformed trust will be treated as a standard unitrust from inception.  MORE »

One of the greatest planning challenges for many philanthropists is to balance their goals of providing for charity in the immediate term and family members long-term. In this case study, The Sharpe Group illustrates how a couple concerned about an uncertain gift and estate tax environment uses an inter vivos nongrantor nonrersionary charitable lead annuity trust as a "temporary" private foundation.  MORE »

Treasury has issued proposed regulations that will amend the regulations under section 642(c) to confirm that a provision in a governing instrument of a charitable lead trust or in local law that specifically provides as to the source out of which amounts are to be paid, permanently set aside or used for a purpose specified in section 642(c) must have economic effect independent of income tax consequences in order to be respected for Federal tax purposes. Accordingly, payments to a charity will consist of the same proportion of each class of the items of income of the trust as the total of each class bears to the total of all classes. See § 1.642(c)-3(b)(2).  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 2008-33 indicates the applicable federal rate under section 7520 for July 2008 is 4.2%; up 0.4% from the June rate of 3.8% and up 1.0% from the May rate of 3.2%.  MORE »

Writing on behalf of of the American Institute of Certified Public Accountants, Jeffrey R. Hoops has submitted comments to clarify that unrelated business taxable income ("UBTI") does not retain its character as such if it is distributed by a charitable remainder trust ("CRT") to a charitable organization as part of the annual annuity or unitrust payment. Although uncommon, it is possible to name a section 170(c) organization as a co-income recipient of a CRT.  MORE »

The IRS has released revised Publication 557 - Tax-Exempt Status for Your Organization (June 2008). The publication incorporates numerous changes in law brought about by the Pension Protection Act of 2006 that affect tax-exempt organizations.  MORE »

The Service has ruled privately that the division of a charitable remainder trust pursuant to a marital separation agreement will not result in a private foundation termination tax under section 507, will not be an act of self-dealing under section 4941, and will not be a taxable expenditure under section 4945 of the Code.  MORE »

In separate letter rulings, the IRS has ruled that educational institutions that issue investment units from their endowment funds to CRTs for which they serve as trustee will not produce unrelated business taxable income to the trusts.  MORE »

S. 3098, the Alternative Minimum Tax and Extenders Tax Relief Act of 2008, introduced by Senate Minority Leader Mitch McConnell, R-Ky., would extend alternative minimum tax relief and a number of expiring provisions. Of interest to charitable planners are tax-free distributions from individual retirement plans for charitable purposes, enhanced charitable deduction for contributions of food inventory, extension of enhanced charitable deduction for contributions of book inventory, and basis adjustment to stock of S corporations making charitable contributions of property.  MORE »

The Service has approved the division of a charitable remainder unitrust into two separate trusts following the divorce of the trustors. The division of the trust will not cause either party to realize gain and the assets of the newly formed trusts will bear the proportionate cost basis and same holding period as in the original trust.  MORE »

Writing on behalf of the Council on Foundation and its public charity members, Janne G. Gallagher has submitted extensive comments and suggestions on the draft instructions for IRS Form 990. Key areas of concern involve the reporting of funds that are similar to donor advised funds, travel and entertainment expenses for government officials, and the reporting of grants and other forms of economic assistance that benefit interested persons.  MORE »

Writing on behalf of Kaspick & Co., Heidi Strassburger has asked that proposed regulations under Sec. 1.67-4 pertaining to the rules for subjecting investment advisory fees of trusts to the 2% floor exclude investment advisory fees for Pooled Income Funds by suggesting that doing otherwise would defeat legislative intent.
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Notice 2005-41 explains new rules governing charitable contributions of intellectual property made after June 3, 2004. Although no change to the notice is anticipated, the Service is seeking comments regarding the efficiency of its information collection processes. Comments should be received by August 4, 2008.  MORE »

The IRS has released the transcript of an interview it conducted with its own Steven T. Miller, Commissioner of the Tax Exempt & Government Entities Division of the IRS, in which he describes how the Service monitors charities and churches getting involved in political campaigns and the various sanctions that might be imposed.  MORE »