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IRS Exempt Organization Newsletter 2012-22

January 28, 2013

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On January 16, the IRS released its Exempt Organization Newsletter, Issue Number 2012-22. Topics include the following

  • EO’s Annual Report and Workplan for the current fiscal year are now available
  • IRS issues proposed regulations on shared responsibility provisions of the Affordable Care Act
  • Legislative changes affecting EOs
  • Voluntary Classification Settlement Program modified
  • 2013 updated procedures
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    Update on Group Exemptions

    January 28, 2013

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    Update on Group Exemptions

    January 28, 2013

    Authored by: Nathan Boyce

    Background

    The group exemption process allows a “central organization” that is itself exempt under Code Sec. 501(c) to obtain a group exemption for its “subordinates”.1   The subordinates must satisfy certain requirements, including that: (i) they must be subject to the “general supervision or control” of the central organization; (ii) they must all be exempt under the same subsection of Code Sec. 501(c) (which can be different than the central organization’s); and (iii) they may not be private foundations.  Once a group ruling is obtained, the central organization has the authority to add or remove subordinates (and must provide annual notice to the IRS of such changes) and the central organization may file a group Form 990 return to cover subordinates (in addition to the central organization’s own Form 990).  According to the Advisory Committee on Tax Exempt and Government Entities (“ACT”), there are over 4,300 group exemptions covering approximately 500,000

    IRS Exempt Organization Newsletter 2012-21

    January 18, 2013

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    On January 16, the IRS released its Exempt Organization Newsletter, Issue Number 2012-21. Topics include the following

  • IRS Exempt Organizations wants graduate students for summer internships
  • EO seeks academic hosts for workshops for small and medium-sized 501(c)(3) organizations
  • A Positive View on the Impact of the Fiscal Cliff Tax Act

    January 16, 2013

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    In our January 4 post, we summarized an article where the author presented the viewpoint that the American Taxpayer Relief Act of 2012 could have a negative impact on charitable giving in light of the reinstatement of a limitation on itemized deductions.   The Urban Institute Center on Nonprofits and Philanthropy has released an article “What Does the Fiscal Cliff Deal Mean for Nonprofits” (January 2013), where the authors (Joseph Rosenberg, C. Eugene Steurle, and Katherine Toran) take a different view, providing “[t]he major individual income tax provisions are estimated to increase giving by $3.3 billion or 1.3 percent, relative to 2012 law, mainly because of the increase in the top marginal tax rate.”  The article goes on to explain that the impact of the limitation on itemized deductions “has negligible effects on the tax incentive for charitable giving.”  The full article may be obtained by clicking

    IRS Updates Retirement Plan Correction Program (Including Plans for Charities)

    From BenefitsBryanCave.com

    After a long wait, an updated Revenue Procedure for the Employee Plans Compliance Resolution System (EPCRS) was released in the form of Rev. Proc. 2013-12.  The new Revenue Procedure makes some important changes to the EPCRS.

    As many plan sponsors know, the EPCRS includes the self-correction program (SCP), which requires prescribed corrections but does not require submission to the IRS; the voluntary correction program (VCP), which requires both prescribed corrections and submission to and approval by the IRS; and correction of problems discovered on audit (Audit CAP).

    The purpose of the updated Revenue Procedure is to improve some features of the EPCRS and clarify others, based in large part on comments from the employee benefits community.  The IRS expects to make more changes of this type in the future, also based on comments from the employee benefits community.  Generally speaking, the IRS was responsive to

    Effects of the American Taxpayer Relief Act of 2012 on Estate Planning

    January 4, 2013

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    Unless you have been living on a tropical island with no television, cell service, or internet for the past few days, you have probably heard that the Federal government passed a new law this week, averting the “fiscal cliff” by the skin of their teeth (well, at least with respect to tax reform, it remains to be seen what will happen with spending cuts). While there are many portions of the “American Taxpayer Relief Act of 2012” (the “2012 Act”) that may apply to you (for example, see our prior post on the effects of the 2012 Act on charitable gifting), our focus now is on how the new law affects your estate planning.

    Could theTax Relief Act Hurt Charitable Giving?

    January 3, 2013

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    Effective December 31, 2012, Congress passed The American Tax Relief Act of 2012 (the “Act”) to avoid the fiscal cliff and President Obama is expected to sign the bill into law.  The full text may be obtained by clicking here.  In a Chronicle of Philanthropy article (which may be obtained by clicking here), Doug Donovan writes that the Act may hurt charitable giving in light of the fact the Act “reinstates a provision eliminated in 2010 that reduces itemized deductions by 3 percent of the amount that household income exceeds $300,000.”  Mr. Donovan goes on to explain that “[w]rite-offs grow more limited the more taxable income a person has and could reduce the value of deductions by up to 80 percent for the highest-income taxpayers, according to the Tax Policy Center.”

    Although it is too soon to gauge the actual impact of the Act, on its

    IRS Exempt Organization Newsletter 2012-20

    January 2, 2013

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    On December 28, the IRS released its Exempt Organization Newsletter, Issue Number 2012-20. Topics include the following

  • IRS and Treasury issue final regulations on the fee on certain issuers and plan sponsors
  • Proposed regulations issued on Net Investment Income Tax
  • Proposed regulations issued on Additional Medicare Tax
  • Tax preparers must renew their PTINs and those required to take the RTRP test should schedule it as soon as possible
  • IRS offers tips for year-end giving
  • Online tool to search charities and other nonprofits
  • Regulations for Type III supporting organizations
  • Happy New Year!
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