Month: July 2011

Current & Quotable Focus on IRS and Treasury

EO Tax Journal 2011-127

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The sad state of Treasury/IRS guidance is on full display today. First is a report on an organization called Americans Elect that claims to be a section 501(c)(4) section but appears to be a burgeoning political party. With the IRS unable or unwilling to address political activity by (c)(4)s, must we concede that this organization is being “operated exclusively for the promotion of social welfare”? The second is a letter expressing concern about “the continuing failure of the Treasury Department and the Internal Revenue Service to promulgate legally-defensible audit procedures for examining churches and organizations claiming to be churches.”

Next week I’ll summarize all the “solutions” I’ve received to the lack of guidance problem discussed the last two days. Until then, I’m left to continue to wonder why the relatively simple section 7611 regulations — proposed in 2009 — have not been finalized.

1 – Can a Political Party Be a (c)(4)?

2 – Missing In Action – Section 7611 Regulations

3 – How Much is Too Much?

Focus on IRS and Treasury

EO Tax Journal 2011-124

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1 – CPA Characterizes Miller Memo as “Belated Acknowledgment that the Service Did Not Have a Legal Leg to Stand On”

2 – Proposed Revenue Procedure Addresses Ex Parte Communications

I’m told this proposed revenue procedure is a noncontroversial update of Rev. Proc. 2000-43, which makes one wonder why the IRS is setting it out in proposed form, rather than simply issuing an updated revenue procedure. 

Focus on Congress Transcripts (ABA EO Committee)

EO Tax Journal 2011-122

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1 – Grassley Amendment on Nonprofit Accountability Advances in Committee

2 – Practical Problems and Practical Solutions for Private Foundations

On July 6, I said that I’d have a transcript of the last panel of the May 6 meeting of the EO Committee of the ABA’s Tax Section “shortly.” So from now on I will define “shortly” as anything less than three weeks. Compare this with the IRS’s defintion of “soon,” which is anything less than thirty years. Also on July 6, I sent along the materials prepared for the last panel, which I’m sure everyone has read, but if not, you can refer back to email update 2011-112.

Current News and Developments

EO Tax Journal 2011-121

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It’s hot everywhere, it’s the middle of July, news is supposed to be slow, so what do I have instead but one story after another to report. Whatever happened to the lazy days of summer?

1 – Mystery Solved

2 – IRS Alerted to Current 501(c)(4) Problems in 2002

3 – Some Nervousness Among Conservative (c)(4) Political Groups

4 – Should Liberal Group Be Nervous?

5 – The Sad Saga of Hershey Continues

6 – Cockroaches Remain, Facade Easements in Jeopardy

PLRs, TAMs, and Denial Letters

EO Tax Journal 2011-120

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In regard to Monday’s discussion titled “IRS Denies 501(c)(4) Status to Three Organizations Primarily Benefiting a Political Party,” Beth Kingsley of Harmon, Curran, Spielberg & Eisenberg LLP, Washington, has brought to my attention a 2003 denial letter that I should have included on Monday, so I’m reprinting it today. According to Beth, the 2003 denial letter is consistent with the latest denial letters.

Current News and Developments

EO Tax Journal 2011-119

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1 – The Iron Man of EO

2 – Is This the Camel’s Nose in the Tent?

3 – Common Cause Seeks IRS Audit of American Legislative Exchange Council

4 – Legal/Tax Ethics Discussion

5 – In D.C., Facade Easements Are as Ubiquitous as Cockroaches

PLRs, TAMs, and Denial Letters

EO Tax Journal 2011-118

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Some interesting PLRs were released by the IRS last week. Today I’ll note the ones I found of most interest.

1 – IRS Denies 501(c)(4) Status to Three Organizations Primarily Benefiting a Political Party

2 – Three-Year Wait Rewarded in PLR 201128027

The IRS probably got it right in this private letter ruling (reprinted below), involving an ecumenical ministry that offers a broad range of social service programs to the poor and distressed or underprivileged, but lots of slippery slopes had to be scaled, at least in my opinion.

Current & Quotable

EO Tax Journal 2011-117

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Gerry Griffith represented healthcare tax lawyers at this week’s forum on community health needs assessments hosted by the Centers for Disease Control and Prevention and the Public Health Institute in Atlanta. Thanks to Gerry’s help, I have his prepared remarks as well as his accompanying slides.

Section 501(r) of the Code was enacted as part of last year’s Affordable Care Act, and imposes additional requirements on tax-exempt hospitals, including conducting periodically a community health needs assessment, called CHNA for short. While section 501(r) applies to hospitals, its impact may eventually be sector-wide. That’s because in section 501(r) Congress wants hospitals to show that they deserve continued tax-exempt status. The same could be asked of other section 501(c)(3) organizations. Congress may seek to demand that colleges and universities show why they deserve continued tax-exempt status. Similarly for charities classified under section 509(a)(2), which some critics say are mostly quasi-businesses dressed up as charities. In addition, some argue that section 509(a)(1) charities that only receive 10% (or slightly more) of their support from the public are private foundations dressed up as charities. So section 501(r) could be a bellwether of where Congress is going vis-a-vis charities.

Transcripts (ABA EO Committee)

EO Tax Journal 2011-112

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Now that everyone is an expert on “blockers,” it’s on to “Practical Problems and Practical Solutions for Private Foundations,” which was the title of the last panel before the cash bar at the May 6 meeting of the EO Committee of the ABA’s Tax Section. Today I’m sending along the materials prepared for this session, with the transcript to follow “soon” — normal time, not IRS time.

Transcripts (ABA EO Committee)

EO Tax Journal 2011-111

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1 – Call for Con Law Help Answered

2 – Update on UBIT Blockers

As promised last week (see email update 2011-109), I begin this short week with a transcript of the panel discussion on “Update on UBIT Blockers” from the May 6 meeting of the EO Committee of the ABA’s Tax Section.