The joint Treasury and IRS 2021-2022 Initial Priority Guidance Plan was released on September 9, 2021. The Plan includes a work list of projects for the 12-month period ending June 30, 2022 but does not provide for any deadlines. The following are some of the key provisions for exempt organizations (generally, carryovers from the previous year’s plan):
- Guidance revising Rev. Proc. 80-27 regarding group exemption letters. Notice 2020-36 was published on May 18, 2020.
- Guidance on circumstances under which an LLC can qualify for recognition under §501(c)(3).
- Final regulations on §509(a)(3) supporting organizations. Proposed regulations were published on February 19, 2016.
- Regulations under §512 regarding the allocation of expenses in computing unrelated business taxable income and addressing how changes made to §172 net operating losses by section 2303(b) of the CARES Act apply for purposes of §512(a)(6).
- Guidance under §4941 regarding a private foundation’s investment in a partnership in which disqualified persons are also partners.
- Regulations regarding the excise taxes on donor advised funds and fund management.
- Regulations under §6104(c). Proposed regulations were published on March 15, 2011.
- Regulations designating an appropriate high-level Treasury official under §7611. Proposed regulations were published on August 5, 2009.
Compare the above list to the recommended list of priorities provided by the American Bar Association Section of Taxation dated May 28, 2021 available here:
- Regulations under section 512 regarding the allocation of expenses, depreciation, and
similar items shared between an exempt activity and an unrelated trade or business or
between more than one unrelated trade or business, and addressing changes made to the
section 172 net operating loss deduction by section 2303 of the CARES Act.30 (Priority:
- Proposed Regulations pursuant to sections 4958, 4966, and 4967 regarding donor advised
funds.31 (Priority: High)
- Guidance revising Revenue Procedure 80-2732 regarding group exemption letters.33
- For organizations whose exempt activities ordinarily involve meeting in person, guidance
confirming that a temporary failure to meet in person due to conditions attributable to a
disaster that prevents or inhibits in-person gathering, such as the COVID-19 pandemic,
will not affect an organization’s exempt status or foundation classification (e.g.,
educational institutions, churches, social clubs). (Priority: High)
- In the event Treasury is not prohibited at any time during the fiscal year from finalizing
regulations or other guidance relating to the standard that is used to determine whether an
organization is operated exclusively for the promotion of social welfare for purposes
of section 501(c)(4), proposed regulations under sections 501(c) and 527 relating to
political campaign intervention. (Priority: High)
- Revenue ruling under section 4944 regarding the qualification of an equity investment in
a limited liability company as a program-related investment.35 (Priority: Medium)
- Final regulations under section 6104(c) relating to publication of information to state
officials. (Priority: Medium)
- Guidance under section 501(c)(3) providing that the term “charitable purpose” includes
aid or assistance to individual representatives of groups that have been impacted by
structural or institutional racism regardless of whether such individuals are themselves
impoverished, underprivileged, or similarly distressed.36 (Priority: Medium)
- Guidance confirming that an educational organization may fulfill the requirement under Treas. Reg. § 1.170A-9(c)(1) of a “place where its educational activities are regularly carried on” with fully virtual classrooms that offer real-time instruction. (Priority: Medium)
- Guidance on circumstances under which an LLC can qualify for recognition as a taxexempt entity under section 501(c)(3). (Priority: Medium)
- Guidance under section 4941 regarding a private foundation’s investment in a partnership in which disqualified persons are also partners.37 (Priority: Low)
- Proposed regulations under section 509 clarifying that, in certain circumstances, Type I and Type II supporting organizations that designate their supported organizations by name, rather than by class, are permitted to make distributions to publicly supported organizations other than those specifically designated by name. (Priority: Low)
- Final regulations under section 7611 relating to church tax inquiries and examinations. (Priority: Low)