UBIT Transportation Rules: Interim Guidance

By the fall of 2017, GOP leaders of Congress were determined to pass a major tax overhaul before the end of the year. But much of the detail work had not yet been done. They moved draft legislation through each chamber so quickly that many lawmakers were unable to read all, or even a substantial part, of the proposed additions and amendments to the federal tax code before the scheduled votes. Nevertheless, The Read More

What’s New in Latest TE/GE Program Letter

Each year, the Tax Exempt and Government Entities (TE/GE) Division of the Internal Revenue Service publishes a “Program Letter” for the fiscal year. This gives nonprofit organizations, professional advisers, academics, consultants, and all other interested parties a snapshot look at what these IRS officials believe are the most important developments and pressing needs to address. The agency published its TE/GE Read More

Surprise Tax Hits Churches, Other Nonprofits

In the final months of 2017, the GOP majorities in the House and Senate rushed to throw together and pass tax legislation before the end of the year.  What became the Tax Cuts and Jobs Acts of 2017 (“TCJA”) was a hodge-podge of items that had been on various Republican taxation wish lists for some time. The legislation was written, rewritten, revised, and amended at break-neck speed with no Democratic input and Read More

Federal Action – and Inaction

Before the end of September, the U.S. House of Representatives had already recessed until after the November 6th election. The Senate will also recess for a certain amount of time in October and until November 7th. There are lots of unfinished pending and proposed federal legislative items that will languish until at least the lame-duck session; that is, November and December. Depending on the outcome, it’s unclear Read More

Johnson Amendment: Backdoor Repeal on the Table

During the 2016 presidential campaign, the Republican nominee fired up his evangelical supporters with a promise to repeal the Johnson Amendment, the brief phrase at the end of Internal Revenue Code section 501(c)(3) that bans any political-campaign activity.   At the first National Prayer Breakfast of the new Administration, he told the gathered group that he would “get rid of and totally destroy” it.  In the Read More

IRS Announces New 501(c)(3) Databases

A scenario repeated many times each day around the United States: A prospective donor is ready to sign a huge check to a favorite 501(c)(3) but wants assurances that the group is still eligible for tax-deductible contributions. Similarly, a foundation wants to award a grant to a worthy organization and needs confirmation of that group’s exempt status. Particularly since 2006, this matter has taken on a new sense Read More

Supreme Court Vacancy and 501(c)(3)s: What are the Rules?

Washington, D.C. is brutally hot in the summer. This year in the nation’s capital, the months of July and August - and perhaps several beyond - will sizzle more than usual, now that pivotal Supreme Court Justice Anthony Kennedy has suddenly announced his retirement and President Trump has named his nominee to succeed him, Judge Brett Kavanaugh. This will be no run-of-the-mill Supreme Court confirmation battle - if Read More

New Unrelated Business Income Rules

In last December’s overhaul of the federal tax code, lawmakers included four provisions directly affecting certain nonprofits. One of the new laws makes dramatic changes to Internal Revenue Code section 512(a), the unrelated business income tax (UBIT) rules.    Multiple Unrelated Businesses The key change affects those groups that have more than one unrelated trade or business. Before the Tax Cut and Jobs Act Read More

Expenditure Responsibility: A Primer

Over the 100 years or so that the United States has had a federal income tax, Congress has, from time to time, stepped back, evaluated the existing laws, and made significant revisions to the Internal Revenue Code. The Tax Reform Act of 1969 was one such occasion of major tax law changes. For the philanthropy community, it marked the first time there was a distinction within the 501(c)(3) tax-exemption category Read More

IRS Asks for Priority Guidance Suggestions

The Internal Revenue Service’s primary mission is the administration of the federal tax laws. Part of that responsibility is guidance and education of individuals and entities that are subject to these tax provisions. Each year, well in advance of the beginning of the upcoming fiscal year (July 1 - June 30), the IRS, in coordination with Treasury Department officials, produces a document called the Priority Read More