The Internal Revenue released a report on February 24, 2006 summarizing its 2004 Political Activity Compliance Initiative ("PACI") project which focused on the political activity by charitable tax-exempt organizations during the 2004 election cycle. The press release issued in connection with the Report stated that "early three-quarters of 82...
IRS & FEDERAL TAX ISSUES
Evans & Rosen on Unrelated Business Income Tax
On February 3, 2006, I attended a CompassPoint program on unrelated business income tax (UBIT) presented by Cherie Evans and Barbara Rosen of Evans & Rosen. Cherie and Barbara are colleagues of mine in the practice area of exempt organizations or nonprofit law. Both spent part of their legal...
Public Support Tests- Unusual Grants
An organization exempt under IRC 501(c)(3) may qualify as a public charity if (1) it normally receives one-third of its TOTAL SUPPORT from sources that qualify as PUBLIC SUPPORT (One-Third Support Test); or (2) it meets the Facts and Circumstances Test, including the Ten-Percent-of-Support Requirement. PUBLIC SUPPORT includes: Direct...
Public Support Tests – Public Charities
You'll find a discussion of the general advantages of classification as a public charity rather than a private foundation in a January 1, 2005 post. This post will discuss how charitable organizations receive recognition as a public charity under IRC Section 509(a)(1). Background: All 501(c)(3) organizations are categorized as...
Vehicle Donations
IR-2005-149, December 22, 2005 WASHINGTON – Internal Revenue Service officials today reminded taxpayers that they must obtain a charity’s written acknowledgment of their vehicle donation before they claim a deduction for their donation. For deductions of more than $500, the taxpayer is required to attach the acknowledgment to the...
New Director of IRS Exempt Organizations Division
Lois G. Lerner has been selected as the director of the Exempt Organizations Division of the Internal Revenue Service. In this position she will be responsible for administering and enforcing the tax laws that apply to more than 1.8 million organizations recognized by the IRS as exempt from tax. ...
IRS Exempt Organizations Division 2006 Priorities
EO will continue its balanced approach to tax administration through its emphasis on enforcement and addressing abusive transactions, while maintaining education and outreach to the tax-exempt community. The critical initiatives commenced in FY 2005 will be completed in FY 2006. 1. New initiatives planned for FY 2006 involve abuses...
IRS Exempt Organizations Division 2005 Accomplishments
The following list of accomplishments of the Exempt Organizations (EO) division of the IRS in 2005 is excerpted from the IRS Letter to colleagues, members of the press and taxpayers dated as of October 25, 2005: 1. Disaster Relief. EO acted swiftly after Hurricane Katrina by immediately issuing a...
New User Fee Schedule for 2006
EO letter ruling fees, which previously ranged from $155 to $2,570, will increase to $275 to $8,700. Effective February 1, 2006. EO fees for determination letters and requests for group exemption letters, which currently range from $150 to $500, will increase to $900. Effective July 1, 2006. EO will...
Vehicle Donation Deductions
The IRS announced on December 20, 2005 that it will not treat vehicles sold at auction as qualifying for the sale to needy individuals exception that permits a fair market value deduction. Under the American Jobs Creation Act of 2004, a donor’s deduction for a vehicle donation is generally...