Bryan Cave Charity Law

Charity Law

ARCHIVE

Main Content

IRS Exempt Organization Newsletter 2011-14

August 18, 2011

Categories

On August 8, the IRS released its Exempt Organization Newsletter, Issue Number 2011-14.  Topics include the following:

  • New Form for Miscellaneous Determination Requests
  • IRS Names New TE/GE Division Counsel
  • Basic Rules for Restructuring Tax-Exempt Obligations
  • Register Now for Remaining 2011 Tax Forums
  • August 25: Free Employee Plans Free Phone Forum on Plan Corrections
  • Click here to review IRS Newsletter Issue 2011-14.

     

    Never Pay Taxes Again

    Never Pay Taxes Again

    August 18, 2011

    Authored by: Nathan Boyce

    Imagine you are talking to a friend of a friend at a party, who says that you can avoid ever paying income taxes by taking six simple steps:

    (1) form a corporation with the word “church” in the title; (2) appoint yourself president/minister of the church; (3) transfer your home, car, weekly income and other assets to the church; (4) transfer your debt (mortage), car loans, etc. to the church; (5) continue to spend your time and money as you did before; (6) have the church pay you for your services as president/minister and pay your expenses (home, car, credit cards, kid’s tuition, etc.)

    What would you do?

    IRS Exempt Organization Newsletter 2011-13

    August 17, 2011

    Categories

    On July 22, the IRS released its Exempt Organization Newsletter, Issue Number 2011-13.  Topics include the following:

  • EO to Present New Webinar on International Activities of Domestic Charitable Organzations
  • Register Now for Fall Workshops for Small and Medium-Sized 501(c)(3) Organizations
  • IRS Seeks Comments on Updated Rules for Communications with Appeals Office
  • IRS Issues Letters to Preparers Who Failed to Follow PTIN Rules
  • TEB Issues Report on Charitable and Governmental Financings Projects
  • Click here to review IRS Newsletter Issue 2011-13.

     

    New Form 8940 – A Small Step in the Right Direction

    August 9, 2011

    Categories

    The IRS has released Form 8940, Request for Miscellaneous Determination, that tax-exempt organizations will use to request certain determinations about their tax-exempt status.  In addition to foundation status issues, organizations will use Form 8940 to obtain advance approval of certain activities and exemption from Form 990 filing requirements.

    Although Form 8940 is a step in the right direction, it does not go far enough.  As I indicated in my prior post, there currenly is no process for a tax-exempt organization to seek IRS approval of expanded or changed activities.  Form 8940 should be revised to include a new Type of Request, “Notice of Material Change in Activities,” that will allow tax-exempt organizations, in their sole discretion, to file a notice of such changes and request an updated determination letter that such activities do not jeopardize the charity’s exempt status.  We will continue to

    Defining Church

    July 26, 2011

    Categories

    Defining Church

    July 26, 2011

    Authored by: Nathan Boyce

    In a previous blog , I described the revocation of church status of the Foundation for Human Understanding.  In that case, the Federal Circuit Court of Appeals  discussed three different tests to determine church status.  These tests (naturally) intrigued me so gave up playing angry birds for three days to dedicate myself to researching all of the cases I could find that determine church status.  I determined that all of the different approaches that have been used to determined if an organization is a church (and there are more than 3) could all fit under one of the tests–the approach set forth in the 1980 District Court case: American Guidance Foundation, Inc. v. U.S.  In short, the test requires examining 14 Factors established by the IRS and requires at a minimum that the organization have “a body of believers

    IRS Exempt Organization Newsletter 2011-12

    July 19, 2011

    Categories

    On July 7, the IRS released its Exempt Organization Newsletter, Issue Number 2011-12.  Topics include the following:

  • Notice and Request for Comments Regarding the Community Health Needs Assessment Requirements for Tax-Exempt Hospitals
  • Report of the Advisory Committee on Tax-Exempt and Government Entities
  • New YouTube Video: How to Get Your Tax-Exempt Status Back
  • New Directive on Booster Clubs and Non-Exempt Activity
  • Summer SSA/IRS Reporter
  • New IRS Webinar Recordings
  • Save the Date:  NASCO Annual Conference Scheduled for October 3, 2011
  • Register Now for Nationwide Tax Forums
  • Click here to review IRS Newsletter Issue 2011-12.

     

    IRS Exempt Organization Newsletter 2011-11

    July 15, 2011

    Categories

    On June 13, the IRS released its Exempt Organization Newsletter, Issue Number 2011-11.  Topics include the following:

  • IRS Names New Members to Advisory Committee on Tax-Exempt and Government Entities — Public Meeting to be Held June 15
  • Report of Foreign Bank and Financial Accounts (FBAR) Due June 30
  • Guidance for Organizations Automatically Revoked for Failure to File Annual Return or Notice for Three Consecutive Years and Contributors
  • Return Preparer Office Now on Facebook
  • Click here to review IRS Newsletter Issue 2011-11.

    IRS Healthcare GuideWire – Notice 2011-52

    Notice 2011-52 describes regulatory provisions that Treasury and the IRS intend to propose regarding the community health needs assessment (CHNA) requirements applicable to charitable hospital organizations under the Patient Protection and Affordable Care Act of 2010. The notice describes how hospital organizations can document a CHNA in a written report, make the CHNA widely available to the public and adopt an implementation strategy to meet the health needs identified through the CHNA.

    Gift Tax and 501(c)(4)s

    July 10, 2011

    Categories

    Gift Tax and 501(c)(4)s

    July 10, 2011

    Authored by: Keith Kehrer

    For decades there has been a risk and concern whether the IRS would seek to apply the gift tax to contributions made to a Section 501(c)(4) social welfare organization.  In May the IRS confirmed that it had sent letters to five donors who had not filed gift tax returns in connection with a contribution to a Section 501(c)(4) in order to determine if returns should have been filed and if the gifts were taxable.  Obviously, the impact of taxing contributions to Section 501(c)(4) organizations is substantial and arguably represents a deviation from “industry” practice. 

    On July 7, the IRS Deputy Commissioner for Services and Enforcement announced that any current audits should be closed and that his office will be coordinating with the Office of Chief Counsel to determine whether there is a need for further guidance in this area.  Click here to read his full statement.  The IRS website was also

    The Private Benefit of Social Networking

    The so-called “private benefit doctrine” prohibits 501(c)(3) organizations from providing a “substantial” benefit to private parties. Much has been said and written about what constitutes a substantial benefit; for purposes of this blog, I will simply provide an example to illustrate the point. An organization that presents musical performances, for example, may generally qualify under 501(c)(3). But if it (i) pays its performers twice fair market value, (ii) arranges for all performers to sign a subsequent contract with a for-profit arts company or (iii) if it only performs for one wealthy family, then it would violate the private benefit doctrine by providing a prohibited substantial benefit to (i) the actors, (ii) the for-profit company or (iii) the wealthy family.

    In PLR 201125045, the organization’s mission was to “foster intercultural understanding to the world through cultural exchange” and it sought 501(c)(3) status on the basis that it furthers an educational purpose through

    The attorneys of Bryan Cave LLP make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.