Current News and Developments

Today members of the EO Committee of the ABA’s Tax Section meet in Denver. I’ll have a transcript of the six panels in the near future. For your weekend reading, I’m sending along the outline to be used by panelists at the session on “Tax Issues Affecting Disaster Relief,” as well as a Fact Sheet on ACOs just released by the IRS.

1 – The EOTJ Mailbag

3 – Senate Finance Committee to Review Incentives for Charitable Giving

1 – The EOTJ Mailbag

2 – Latest EO Committee Meeting Preview

As part of the panel on Healthcare Reform under the Patient Protection and Affordable Care Act, it appears Elizabeth Mills will be discussing joint ventures at the October 21 meeting of the EO Committee of the ABA’s Tax Section. As one can tell from her outline, reprinted below, this is an important area that has largely been ignored by the IRS in recent years. Thirteen years ago we got Rev. Rul. 98-15 and its two extreme examples — good Situation 1 and bad Situation 2. Then we had a couple of court cases and, as Mills notes, we had Rev. Rul. 2004-51, “the most recent Service pronouncement on joint ventures.” Since this is a no-rule area, there are no private letter rulings. It has been reported that the IRS has accepted some joint venture arrangements in the context of applications for exemption, but we’ve learned few details.

Yesterday I went to day one of the annual tax program of the American Health Lawyers Association. The tone of the conference seemed to me to be set by the first session, “Through the Looking Glass,” featuring Theresa Pattara, Tax Counsel to Senator Charles Grassley, and Ron Schultz, who spearheaded the revised Form 990 effort when he was with the IRS, but who now resides within the hallowed halls of PricewaterhouseCoopers. As backdrop, we really needed David Fish’s musical accompaniment, with him singing, a la Mary Hopkins: “Those were the days, my friend, we thought they’d never end, we’d sing and dance forever and a day.”

As it is, peace reigns in the valley, now that the big bad wolf, Chuck Grassley, has moved to the Senate Judiciary Committee, and his sidekick, Dean Zerbe, to private practice. While Theresa reminded us of those days of lightning bolts, now section 501(r) and the defanged Schedule H are looked upon mostly as profit opportunities for accountants and attorneys, certainly not the feared Armageddon. Ron Schultz reminded us that the worst that came out of those fearful days was the need for a hospital to do a community health needs assessment. Other than some misguided folks in Illinois, all is well in the hospital community, at least from a tax perspective, in year 2011.

Following Pattara and Schultz was Steve Clarke, who is now the IRS’s ultimate authority on all Form 990 matters. He brought with him two colleagues, Judy Kindell and Garrett Gluth. Judy said that for the IRS folks it’s Happy New Year. Again, we needed David Fish, this time to sing Auld Lang Syne to mark the end of the IRS’s fiscal year. Not surprisingly, the EO Division is starting its new year without a workplan, but Judy promises it “soon,” which probably means we can expect it in time for Valentine’s Day. Speaking of the EO Division, my latest roster is already out of date, as Melaney Partner has been selected as the new Customer Education & Outreach director, and Holly Paz will be going on maternity leave, with the aforementioned David Fish acting for her, and Mary Jo Salins acting for him. The good news coming out of the EO Division is that, of the 300,000 automatic revocations, only 4,000 have sought reinstatement to date, indicating that most revoked organizations are defunct, hopefully abating Bill Brockner’s fears that these mass revocations would be cataclysmic for his beloved garden clubs and similar organizations clueless as to their tax obligations. 

1 – The EOTJ Mailbag

2 – Oprah Nudged Out by Gates and Buffett

4 – Whither the EO Division?

1 – EOTJ Mailbag

6 – IRS Revoking Credit Unions by Mistake?

1 – EOTJ Mailbag

3 – ECFA Announcement

With Labor Day approaching, I’m clearing off my desk of old business today so I can start fresh next week. If I missed anything, including your missives, my apologies, but in the last few weeks I’ve survived an earthquake, a hurricane, a power outage, and having my garage struck by lightning, so those are my excuses and I’m sticking with them.

1 – The EOTJ Mailbag

2 – Ellen Aprill Explains All

3 – New GuideStar Publication

1 – More on Compensation

5 – Calling Nan Downing — Have These Guys Been Audited?

1 – Response to Beth Kingsley Interview

4 – Is This Organization a Good (c)(3)? 

1 – Reaction to Latest ACT Committee Report

2 – EO Committee to Meet in the Mile High City

If you have not read the complaint filed against Citizens for Responsibility and Ethics in Washington, reprinted below, please read first the following Mission Statement of a group I’m calling XYZ and decide whether XYZ is an organization that could qualify under section 501(c)(3). To me it is a close question whether an organization that investigates elected government officials can satisfy the requirement that it “does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”

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

6 – Cockroaches Remain, Facade Easements in Jeopardy

1 – The Iron Man of EO

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

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

1 – Form 990 Developments

4 – Gunderson to Leave Council on Foundations on September 1

1 – Have a Happy Fourth of July

3 – Nonprofit Corporate Restructuring
(continued from email update 2011-109)

This and That

In response to yesterday’s query, “What would she have gotten if she had succeeded?”, Penelope says 15 days. Penelope says she got 30 days because she botched the job.

Regarding Bill Brockner’s comments published yesterday, Odysseus takes issue with Bill’s implication that small organizations, which are “generally without the benefit of expensive CPA and/or Bar assistance,” will now be required to hire the same. Odysseus wonders if Bill knows how simple it is to complete an e-Postcard, since all that is required are eight simple entries.

1 – More On Kip Dellinger’s Observations

2 – Is the Form 990-N Part of a Federal Conspiracy against Nonprofits?

3 – Using Affiliated Entities for Advocacy and Politics

Today I’m sending along Bob Boisture’s article on the recent AARP hearing. His article was previously published by Tax Analysts, so you may have already seen it.

Bob is very concerned by what he views as the deeply flawed legal analysis presented in the report on AARP prepared by two House Republicans. He is also concerned that AARP has not presented a more rigorous and comprehensive statement of its legal position. In his opinion, AARP has by far the stronger side of the legal issues raised in the report, but he does not believe AARP’s various public statements have made this sufficiently clear, making it easier for House Republicans to justify continuing their investigation.