EO Tax Journal

So far I have sent out transcripts of the first three panels of the February 4 daylong meeting of the TE/GE area councils in the following email updates:

“Update from the IRS” (Holly Paz) — Email Update 2011-33
“Three Year Revocation, Consequences, Reapplying for Exempt Status” (Matthew Giuliano) — Email Update 2011-36
“The 2010 Form 990” (Steve Clarke) — Email Update 2011-39

This week I am going to jump out of order and go to panel five, as we are having some problems with transcribing panel four. Today I’m sending along the handout prepared for panel five, which served as the basis for Gerry Griffith and Joyce Hellums’ remarks, to be followed tomorrow with the transcript of their presentation. Continue…

Today I have a transcript of the third panel of the February 4 daylong meeting of the TE/GE area councils. A transcript of the first panel, “Update from the IRS” with Holly Paz, appeared in email update 2011-33, and a transcript of the second panel, “Three Year Revocation, Consequences, Reapplying for Exempt Status” with Matthew Giuliano, appeared in email update 2011-36. These transcripts are giving EO tax practitioners across the country insights into the IRS’ current thinking, so I think we are all indebted to the IRS and the TE/GE area councils for helping make this happen.

The 2010 Form 990

What follows are the February 4 remarks of Steve Clarke, Tax Law Specialist, EO Rulings & Agreements, IRS, as delivered at the TE/GE area councils’ annual meeting. The moderator of the panel is Kathy Pitts of Ernst & Young. Continue…

On Tuesday I sent out a transcript of the first panel of the February 4 daylong meeting of the TE/GE area councils. Today I am emailing the transcript of the second panel, “Three Year Revocation, Consequences, Reapplying for Exempt Status” that followed the “Update from the IRS” panel.

Yesterday I had information the IRS released on its website under the title of “Delayed Filing Season for Certain Tax-Exempt Hospital Organizations.” Also yesterday the IRS released the 2010 instructions for Schedule H of the Form 990 with a somewhat extensive “What’s New” discussion that I am reprinting below.

Also yesterday (lots of yesterdays — sounds like a Beatles song), I noted that Lois Lerner said on Wednesday that the IRS will be putting a list of revoked small organizations on its website. So, like clockwork, the IRS had the following notice — yesterday — on its website:

1 – Format for Upcoming Nonfiler Automatic Revocation List Continue…

Today I start emailing transcripts of the February 4 daylong meeting of the TE/GE area councils. The first panel is “Update from the IRS,” starring Holly Paz. For those of you who went to the January 21 meeting of the EO Committee of the ABA Tax Section, there is some overlap, since both Holly and Lois Lerner discussed EO staffing and the EO workplan, among other topics. I’ve inserted head notes in the transcript so if you’ve heard enough about staffing or the workplan, you can skip to the next topic.

There is one major difference between the meetings. About halfway through her presentation, Holly stopped and said: “I want to make sure to leave some time for questions so I’ll turn it over to you.” With that, attendees spent the next half hour asking questions. In comparison, the ABA panel at which Lois spoke had three to four minutes for questions.

Having commented on this before, I decided to do some statistical analysis of the January EO Committee meeting. Of the six panels, spanning 345 minutes — that’s almost six hours — there was a grand total of 10 to 15 minutes for questions. The average for each panel, all but one of 60 minutes duration, was about two minutes for questions. So at the ABA EO Committee meeting, attendees listened for 330 minutes and asked questions for about 15 minutes.

Why is that? Is the committee leadership afraid that attendees are so uninformed or uninterested that they won’t ask questions if given more than a few minutes? Or are attendees there just for the sun and fun and who cares what anyone is saying? Or is the constant clock-watching, the terrible danger that a panel will go over its allotted time, the problem?

I was shocked several years ago when I was at another ABA committee meeting and the committee chair let the first panel, which featured IRS speakers, run on and on, as people kept asking questions. As the time for the meeting was coming to an end, the chair acknowledged that there was no time for the last panel and they would get to it the next time. As far as I could tell, no one was upset. Apparently, being on the last panel meant you might get booted to the next meeting. The EO Committee may not want to go this far, but a little flexibility might not be the end of the world.

Update from the IRS

What follows are the February 4 remarks of Holly Paz, Acting Director of EO Rulings & Agreements, IRS, as delivered at the TE/GE Councils’ annual meeting. The moderators of the panel are Christopher Ballard of Honigman Miller Schwartz and Cohn LLP, Ann Arbor, Michigan, and Mike Rachael of Ernst & Young, Atlanta. Continue…

1 – Selected IRS Training Materials now on eotaxjournal.com

2 – Transcript of Evangelical Council for Financial Accountability’s Briefing of January 14, 2011
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1 – Selected IRS Training Materials now on eotaxjournal.com

As part of our efforts to make this website even more useful to subscribers, we recently moved to the website IRS EO training materials for 2008 and 2009 (click “IRS Training Materials” under “Topics”). Below I have listed the EO training materials by modules. These IRS training materials are not available on the IRS website and, short of a lengthy and expensive FOIA request, are not available to EO practitioners.

The items listed under “Examinations CPE Materials” are directed to new revenue agents and hence of limited interest to experienced EO practitioners. Much of the information in these training materials is taken from the Code, Regulations, and Internal Revenue Manual, which you can access on irs. gov. However, practitioners new to the EO field may find these materials more user friendly and helpful in developing an understanding of basic concepts..

Experienced EO practitioners should find of more interest materials listed under “Miscellaneous Topics.” For example, I think anyone with a college or university client currently undergoing or concerned about an IRS audit will find of interest the IRS materials under “Colleges and Universities” since it provides a roadmap of IRS concerns. Similarly if you are involved in a gaming audit.

EO Examinations CPE Materials

A-1   Introduction to EO Audit Techniques (24 pages)
A-2   Tools of the Trade (19 pages)
B-1   Exemption Requirements for § 501(c)(3) (29 pages)
B-2   Prohibitions to Exemption under § 501(c)(3) (42 pages)
C-1   Introduction to Unrelated Trade or Business § 511 (7 pages)
C-2   Unrelated Trade or Business § 513 (38 pages)
C-3   Unrelated Business Taxable Income § 512(a)(1) (54 pages)
C-4   Unrelated Business Taxable Income § 512(a)(3) (39 pages)
C-5   Unrelated Debt-Financed Income § 514 (34 pages)
D-1   Public Charities, Private Foundations, and Private Operating Foundations (15 pages)
D-2   Determining Private Foundation Status § 509(a)(1) and 509(a)(2) (25 pages)
D-3   Supporting Organizations § 509(a)(3) (18 pages)
D-4   Net Investment Income §4940 (16 pages)
D-5   Self-Dealing § 4941 (22 pages)
D-6   Taxes on Failure to Distribute Income § 4942 (13 pages)
D-7   Excess Business Holdings § 4943 (9 pages)
D-8   Investments Which Jeopardize Exempt Purposes § 4944 (7 pages)
D-9   Taxable Expenditures § 4945 (10 pages)
D-10  Intermediate Sanctions § 4958 (77 pages)
D-11  § 4955 Overview (14 pages)
E       Gaming (36 pages)
F-1   Introduction to Exemption Forms and Form 990 (35 pages)
F-2   Reading Form 990 (33 pages)
F-3   Interacting with Taxpayers, Representatives and Return Preparers (10 pages)
F-4   Examination Specialist Support (10 pages)
F-5   Pre-Examination Planning and Appointment Scheduling (17 pages)
G-1   Financial Auditing Techniques (49 pages)
H-1   Evidence (10 pages)
H-2   Touring the Facilities (10 pages)
H-3   Interview Techniques (56 pages)
H-4   Information Sources (31 pages)
H-5   Disclosure (6 pages)
I-3    Statute of Limitations (18 pages)
J-1    Fraud (11 pages)
J-2    Fraud Referral (26 pages)

Miscellaneous Topics

K      Colleges and Universities (112 pages)
L       Current Developments (15 pages)
M      Determination of Fair Market Measurements (39 pages)
N      Return Preparer Penalties (67 pages)
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2 – Transcript of Evangelical Council for Financial Accountability’s Briefing of January 14, 2011

For background information, go to “Grassley Releases Review of Tax Issues Raised by Media-based Ministries” at finance.senate.gov. For earlier email updates, see 2011-4 and 2011-10. The moderator of the briefing is ECFA’s President, Dan Busby. Continue…