The IRS released the long-awaited final Regulations for Type III supporting organizations.  The final Regulations may be viewed by clicking here.

The IRS released proposed regulations under Section 4944 providing additional examples of program related investments (PRIs) (PRIs are excepted from the jeopardizing investment rules).  The proposed regulations add nine new examples intended to illustrate that a wider range of investments qualify as PRIs than the range currently presented in Treas. Reg. § 53.4944-3(b). The proposed regulations do not modify the existing regulations; rather, they provide additional examples that illustrate the application of the existing regulations.  Generally, the charitable activities illustrated in the new examples are based on published guidance and on financial structures described in private letter rulings. (more…)

On February 28, the IRS issued final regulations amending sections 301.6104(a)-1(i) and 301.6110-1(a) to expressly allow public inspection of letter rulings denying or revoking an organization’s tax exempt status. The amendments are in response to Tax Analysts v. IRS, 350 F.2d 100 (D.C. Cir. 2003), in which the court held that including denials and revocations of tax exempt status “within the ambit of section 6104″ and, thus, preventing disclosure, violated the plain language of section 6110. The final regulations are published in T.D. 9581, which can be read in full here.

Until recently, when an organization sought public charity status on its Form 1023 and received a favorable determination letter from the Internal Revenue Service recognizing it as exempt under Section 501(c)(3) of the Code, its public charity status (if granted) would be for a five-year “advance ruling period”. After this advance ruling period, the organization would make a separate filing to the IRS to establish public charity status based on satisfaction of one of the Support Tests. On September 7, 2011, final regulations were issued that change the timing and process of determining public charity status.  A brief description of the changes can be read here.

Happy New Year from the Tax-Exempt and Charitable Planning Team!   For many of us, with the New Year often comes resolutions (I know for me, I renew my annual resolution to get in shape).   The IRS is not immune to this process and recently released its 2011 “resolutions” in the form of its annual Priority Guidance Plan.  The 2011 Plan includes the following priorities: (more…)

The IRS has posted additional FAQs on how eligible small business and exempt organizations can claim the Small Business Health Care Tax Credit.  The new health reform law gives a tax credit to certain small employers that provide health care coverage to their employees, effective with tax years beginning in 2010.  A tax-exempt employer described in Code section 501(c) that is exempt from tax under Code section 501(a) claims the refundable credit by filing a Form 990-T with an attached Form 8941 showing the calculation of the claimed credit.  For more information, click here.

On September 22, 2010, the Centers for Medicare and Medicaid Services (“CMS”) issued proposed rules that will dramatically change the enrollment process for Medicare providers and suppliers, including new enrollment following a change of ownership.  The proposed rules are intended to carry out various provisions of the Patient Protection and Affordable Care Act (“PPACA”), particularly section 6401, which requires that HHS develop procedures to screen Medicare providers for risk of fraud and abuse. The rules represent a shift in CMS’ anti-fraud strategy from one that pays first and asks questions later to one designed to prevent fraud before it starts.  These rules will impact many tax-exempt organizations, especially health care organizations.  For more information regarding these proposed rules, please click here.

The IRS today released a draft version of the form that tax-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 tax-exempt organizations –– which do not generally file income tax returns –– will claim the credit during the 2011 filing season.   Tax-exempt organizations will claim the small business health care tax credit on a revised Form 990-T. The Form 990-T is currently used to report and pay the tax on unrelated business income. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations –– even those that owe no tax on unrelated business income –– also to claim the small business health care tax credit.  For more information, please click here.