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Category Archives: IRS Filings

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IRS Finally Confirms that Contributions to Single Member LLCs Owned by Charities Are Deductible

On July 31, 2012, the IRS issued Notice 2012-52 (the “Notice”), providing long awaited confirmation that a charitable contribution to a limited liability company that is wholly owned by a charitable organization, and classified as a disregarded entity for U.S. federal income tax purposes (an “SMLLC”), will be treated as a contribution to a branch … Continue Reading

House Ways and Means Oversight Subcommittee Holds Second in a Series of Hearings on Issues Facing Tax-Exempt Organizations

On July 25, 2012, the Oversight Subcommittee of the House Committee on Ways and Means, led by Congressman Charles W. Boustany Jr., MD (R-LA), heard testimony from the IRS and experts in the tax exempt community on the growing complexity of non-profit organizational structures, tax issues concerning unrelated business income and the redesigned Form 990. … Continue Reading

Proposed Regulations on Federal Income Tax Exemption for Hospitals

As previously reported, the Treasury Department released proposed regulations on June 22, 2012 interpreting and implementing specific requirements for hospitals to maintain their Section 501(c)(3) tax-exempt status under Section 501(r) of the Code.  Section 501(r) was enacted as part of the 2010 Health Care Reform Act (the “Act”). … Continue Reading

IRS Advisory Committee on Tax Exempt and Government Entities Recommends Significant Changes

Last week, the IRS Advisory Committee on Tax Exempt and Government Entities (“ACT”) held a public meeting at which the panel submitted its latest round of recommendations to senior IRS executives.  At the meeting, the ACT’s Exempt Organizations project team presented a report containing several recommendations intended to improve the application process for organizations seeking … Continue Reading

House Ways and Means Oversight Subcommittee Holds Hearing to Review Compliance and Reporting Issues of Tax-Exempt Organizations

On May 16, 2012, the Oversight Subcommittee of the House of Representatives Committee on Ways and Means, led by Congressman Charles W. Boustany Jr., MD (R-LA), heard testimony  from representatives of tax-exempt hospitals, universities and charitable institutions on the current state of compliance and reporting requirements for tax-exempt organizations.  The hearing was the first in … Continue Reading

New Streamlined IRS Online Search Tool Makes it Easier to Find Information about Tax-Exempt Organizations, Including Whether an Organization Has Ever Been Subject to Automatic Revocation of its Tax-Exempt Status

The IRS recently unveiled its new streamlined online search tool, Exempt Organizations Select Check ("EO Select Check"), which provides one place where taxpayers can go to find out: (1) whether an organization is eligible to receive tax-deductible contributions; (2) whether the organization has ever been subject to automatic revocation of its tax-exempt status for failing to file a required Form 990, Form 990-EZ or Form 990-N (aka, the "e-Postcard") for three consecutive years; and (3) whether a small organization has filed the e-Postcard. Previously, taxpayers had to utilize three separate online search sites to find this information (the electronic version of Publication 78 (i.e., the list of exempt organizations eligible to receive tax-deductible contributions), the online Auto-Revocation List and the e-Postcard database).… Continue Reading

Stealth Can Be Good: New Procedure Allows Governmental Entities to Relinquish Section 501(c)(3) Tax-exempt Status

A new provision which was slipped in to the annual announcement of procedures for exempt organization determinations and letter rulings provides a way for governmental entities to voluntarily terminate their Section 501(c)(3) status. This is important for governmental hospitals that otherwise could be faced with new exemption requirements and penalties. … Continue Reading

IRS Extends Filing Deadline for Certain Tax-Exempt Organizations

The IRS has granted an automatic extension for certain tax-exempt organizations to file their annual returns electronically. The extension is being provided because the IRS's electronic filing system (the "Modernized eFile system" or "MeF") will not be available for filing Forms 990, 990-EZ, 990-PF, and 1120-POL from January 1, 2012 through February 29, 2012 (the "Suspension Period"). The extension is only available for organizations with filing due dates (whether original or extended) during the Suspension Period ("Affected Organizations"). Ordinarily, organizations with a fiscal year ending August 31 or September 30 would have filing deadlines during the Suspension Period. Under Notice 2012-4, Affected Organizations will automatically be granted an extension of time to file electronically to March 30, 2012. … Continue Reading

Treasury Releases its Priority Plan and the Form 990 Implementation Regulations

Treasury just released the 2011--2012 Priority Guidance Plan. The Plan lists 317 projects that are priorities for Treasury resources through June 2012. Included in these projects are 13 projects directly related to Exempt Organizations. Many of the other projects such as the 66 employee benefits, executive compensation and employment taxes may affect Exempt Organizations. … Continue Reading

IRS Releases New FAQ Guidance on Reporting Governance Practices on Form 990

The IRS recently released a new list of FAQ and tips for Part VI of Form 990, which requires an exempt organization to provide certain information about its governing board and management, as well as its governance policies and disclosure practices.                 Of particular interest is the clarification that questions in Section B (about whether an … Continue Reading

Type II Supporting Organizations Must Have Readily Identifiable Beneficiaries

In a tightly written plain English opinion, the D.C. Circuit Court of Appeals in Polm Family Foundation v. U.S. explained an important requirement of Type II supporting organizations. To be a Type II supporting organization, a charity must satisfy three tests:   1.                  the organizational test set forth in IRC Section 509(a)(3)(A), 2.                  the relationship test set forth in … Continue Reading

Proposed Regulations Expand IRS Authority to Disclose Charitable Organization Information to State Officials

On March 15, 2011, the Treasury published proposed regulations providing guidance on the IRS’s expanded authority to disclose information to appropriate state officers (“ASOs”) under Section 6104(c) of the Code, as amended by the Pension Protection Act of 2006 (the “Act”) . Section 6104(c) of the Code governs when the IRS may disclose certain information to … Continue Reading

IRS-Treasury Annual Priority Guidance Plan Released

Last week, the IRS and Treasury Department released their annual Priority Guidance Plan for the 2010-2011 federal fiscal year.  The 34-page plan is available here.  The IRS exempt organizations web page identifies and lists eighteen items in the plan that affect exempt organizations.  Of the eighteen items, eleven were also included in last year’s plan – … Continue Reading

IRS Announces how Exempt Organizations can Claim New Health Care Tax Credit

The IRS today has released a draft version of the form that small businesses and exempt organizations will use to calculate the small business health care tax credit when they file income tax returns next year. The IRS also announced how eligible exempt organizations -- which do not generally file income tax returns -- will claim the credit during the 2011 filing season. … Continue Reading

IRS Offers Relief for Small Organizations that Failed to File Returns for Three Consecutive Years

Small not-for-profit organizations at risk of losing their tax exemption because of their failure to file the Form 990-N or Form 990-EZ for the 2007, 2008, and 2009 taxable years can preserve their status by filing these returns by October 15, 2010. The IRS announced yesterday a one-time relief program for these organizations that will give them a "pass" until October 15, 2010. Two types of relief are available for small exempt organizations -- a filing extension for the smallest organizations required to file Form 990-N and a voluntary compliance program ("VCP") for small organizations eligible to file Form 990-EZ. … Continue Reading

Some Pension Plans Must File FBARs by June 30, 2010

The deadline for filing the Report of Foreign Bank and Financial Accounts (FBAR) by U.S. persons that held a financial interest in a foreign financial account for calendar year 2009 if the aggregate value of all the U.S. person's foreign financial accounts exceeded $10,000 at any time during the year is almost here -- all FBAR filings must be received by the U.S. Department of Treasury on June 30, 2010 (not just postmarked by such date). There are no extensions and the failure to file an FBAR can result in significant penalties. … Continue Reading

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