Taxing Lessons From Court Decisions

Decisions — Charitably speaking

Thanks for sharing!
3 minute read
Image source: Simon Maage on Unsplash

 

Are you charitably inclined? If so, you may want to give thanks to the IRS for combining various contribution-guidance revenue procedures dating back to 1981 into a single procedure (Revenue Procedure 2018-32) that is effective as of May 16, 2018.

How up-to-date are you on charitable contribution rules?

 

1

Contributions to or for the use of an organization described as eligible for charitable contributions in internal revenue code section 170(c), may be deductible, with certain limitations, by contributors for federal income tax purposes.

Is it the responsibility of or to ensure that the organization satisfies the qualification requirements of internal revenue code section 170(c)?
 

2

True or false: A contributor may rely on the continued validity of a determination letter or ruling concluding that an entity is a qualified charitable organization until the IRS makes a public announcement of the entity’s change in status.

or

 

3

Before 2011, the IRS maintained the eligible organization list in Publication 78. In 2011, the IRS discontinued the paper version of Publication 78 and began maintaining the eligible organization list solely in an electronic database.

The electronic database was called Select Check and consisted of three searchable databases on the IRS website that contained information about tax-exempt organizations.

The first database listed organizations that “are eligible to receive tax-deductible charitable contributions (Pub. 78 data).”

The second database listed organizations that have had their tax-exempt status revoked for failure to file a required annual return or notice for three consecutive years.

The third database contained the information reported in notices (Forms 990-N) filed by organizations that are not required to file a Form 990 or Form 990-EZ return due to their size.

In May 2018, the IRS changed the name of Select Check to Tax Exempt Organization Search. Tax Exempt Organization Search includes the three databases listed above as well as two additional searchable databases.

The first new database includes images of Form 990 series annual returns filed by tax-exempt organizations on or after January 1, 2018, to the extent that these annual returns are available to the public.

The second new database includes images of favorable determination letters issued by the IRS to organizations to recognize the organization’s tax-exempt status. The searchable determination letters include favorable determination letters issued on or after January 1, 2014.

True or False: Tax Exempt Organization Search allows customers to search interactively across all five databases.

or

 

***

Note: Taxing Lessons provides a summarized version of sometimes lengthy tax publications. The full publication may include facts and issues not presented here. Please use the link provided in the post to read the entire publication.

This information should not be considered legal, investment, or tax advice. Taxing Lessons and Top Drawer Ink Corp. do not provide legal, investment, or tax advice. Always consult your legal, investment, and/or tax advisor regarding your personal situation.

***

Other posts you might enjoy

Decisions — Gifting business   Image source: Joanna Kosinska on Unsplash   When is a gift not a gift? According to the US supreme court, "determination in each individual case as to whether the transaction in question was a "gift" must be based ultimately on the application of the factfinding tribunal's expe...
Decisions — Counting the days Image source: Marcelo Leal on Unsplash All good things must end, including the amount of time the IRS is allowed to assess tax. That time frame is called the statute of limitations. In T.C. Memo. 2018-182 (Namm Trust), the taxpayer says the IRS did not mail a notice of deficiency before the e...
Decisions — Incoming Gift   Image source: lucas Favre on Unsplash   Pastors get by with a little help from parishioners. But is that help a gift? Or taxable income? In T.C. Memo. 2018-168 (Felton), parishioners gave their pastor over $200,000 in cash and personal checks in addition to regular church of...
Decisions — To be fair   Image source: Library of Congress Public domain, via Wikimedia Commons   All may be fair in love and war, but that's not necessarily true in taxes. In TC Memo 2018-117 (Grainger), the taxpayer made noncash charitable donations and claimed a deduction for what she believed wa...
Sorry, wrong answer :(
Right answer!

It is the responsibility of an organization receiving contributions to ensure that its character, purposes, activities, and method of operation satisfy the qualification requirements of internal revenue code section 170(c) at the time of the contribution in order for grantors and contributors to have the assurance that their contributions will be deductible when made.

Right answer!

Under section 1.170A-9(f)(5)(ii) of the regulations, a grantor or contributor may rely on the continued validity of a determination letter or ruling concluding that an entity is described in internal revenue code section 170(b)(1)(A)(vi) until the IRS makes a public announcement of the entity’s change in status.

However, the grantor or contributor may not rely on a determination letter or ruling if the grantor or contributor was responsible for, or aware of, the act or failure to act that resulted in the loss of classification or knew that the loss was imminent.

Sorry, wrong answer :(
Right answer!
Sorry, wrong answer :(
Tagged