Transcripts (Other)

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.

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.

1 – Selected IRS Training Materials now on eotaxjournal.com

2 – Transcript of Evangelical Council for Financial Accountability’s Briefing of January 14, 2011
___________________________

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)
___________________________

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.

The IRS’ Steve Clarke frequently speaks on the Form 990, which is not surprising since he is the Form 990 project manager. I have had transcripts of his remarks this year — see Email Updates 2010-56 and 2010-165. He recently spoke again at the 2010 Western Conference on Tax Exempt Organizations, and I have had transcribed the portion of his remarks that go beyond his earlier comments.

2010 Form 990 Changes

The focus today is on filing requirements — for those who never filed, for those who can’t keep up with the latest Form 990 changes (chiropractic adjustments, rather than major surgery, according to the IRS’ Steve Clarke), and how new section 501(r) affects filing for this year.

1 – Post-October 15 Blues

Unless the IRS has another “Get out of jail free” card up its sleeve, small organizations that missed the October 15 final filing date are now in the soup (but don’t be surprised if Congress later comes to the rescue). For now, Alaska’s Sandy Deja has put together a 41-page ebooklet: Regain Your Tax Exempt Status and Other Options after IRS Automatic Revocation. It’s available atwww.501c3book.com for the low, low price of $8.95.

Contents of Regain Your Tax Exempt Status, by Sandra L. Deja, P.O. Box 10525, Fairbanks, AK 99710:

How To Use This Book
Introduction
Section I – Regain Your Exempt Status – New Application
Chapter 1 – Specific IRS Guidance
Chapter 2 – Re-application Advice
Section II – Regain Your Exempt Status – IRS Revoked In Error
Chapter 3 – No Return Was Required
Chapter 4 – Return Was In Fact Filed
Section III – Information About Group Exemptions
Section IV – Terminate Your Exempt Status
Section V – Do Nothing
Section VI – Links
_____________________________

2 – Form 990 and Section 501(r) Developments

What follows are the October 12 remarks of Stephen Clarke, EO Project Manager, IRS, and Garrett Gluth, EO Tax Law Specialist, IRS, as delivered at the annual tax program of the American Health Lawyers Association.

Ann Batlle and Marc Owens discussed IRS audits at the recent ALI-ABA conference, and today I have a transcript of their remarks. Last Thursday (Email Update 2010-161) I had the remarks of Peter Lorenzetti on EO audits from the IRS’ perspective.

Come Fall, we’ll have a number of interesting programs coming our way – to be reported on here if you are unable to attend in person. But first, it’s time to wrap up any loose ends from the first half of this year. Today I have our final transcript from the annual Georgetown Law EO program. I won’t say we have saved the best for last, lest I offend those who participated in other sessions, but I can say, for those who weren’t there, it’s been worth the wait, and the discussion is as timely as it was in April.

Current Trends in State Charity Regulation

What follows are the April 23 remarks of Eric Carriker, Massachusetts Office of the Attorney General, Cindy Lott, Columbia Law School, New York, and Mark Pacella, Pennsylvania Office of the Attorney General, to attendees at the annual Georgetown Law program on “Representing & Managing Tax-Exempt Organizations.” The moderator of the session is Celia Roady of Morgan Lewis & Bockius, Washington, D.C.

1 – Are You Willing to Die to Save on Taxes?

The current state of the estate tax remains in the news because when you die may make a big difference. The top estate tax rate in 2009 was 45%. Those who die in 2010 face no estate tax but have a carryover basis system. For 2011, if nothing happens, the top estate tax rate will be 55%. So when would you like to die or, better, your rich uncle?

The current issue of Charitable Gift Planning News(contactcgpn@aol.com) has this interesting, although morbid, comment: “Will the difference between no estate tax for a 2010 death, and a substantial tax upon death in 2011, prompt estate holders to ponder suicide (and heirs to think about murder)? The United States is a big country, with many millions of people, and we can expect some macabre stories of this sort to emerge as year-end approaches.”

My comment: Finally, an advantage to being a poor boy.

2 – Day Two of Georgetown Law’s EO Program

Now that I’ve finished sending out the ABA transcripts, I can get back to where I left off with the annual Georgetown EO program.

Today I have Part 2 of a recent D.C. Bar discussion on the interim IRS report on colleges and universities; Part 2 is a transcript of the remarks of Carolyn O. (Morey) Ward. Hopefully, we will have Part 3 on Monday, but we are having some problems transcribing the remarks of Theresa Pattara, as she was the speaker farthest from my tape recorder and there were no microphones set up for the meeting. Yesterday I had the remarks of the three IRS speakers.

Today I have the first half of a recent D.C. Bar discussion on the interim IRS report on colleges and universities. I should have the rest of the story tomorrow.

1 – More on ACT Committee

2 – Intermediate Sanctions Update (Remarks of Doug Mancino and Marc Owens)
__________________________

Today I have the April 22 remarks of Nan Downing, Director, EO Examinations. I believe this is her first major speech as director. Since many of you read these updates while traveling or commuting, I think you’ll find the headers helpful so you can read only what interests you. Next week I expect to have a transcript of the remarks of Doug Mancino and Marc Owens, who followed Nan’s session. They gave their perspective of IRS audit activities, not all favorable, so stay tuned.

IRS’ Steve Clarke Addresses Current Form 990 Issues

Chandler: Welcome to the National Council of Nonprofits Webinar on the Redesigned IRS Form 990. The new form has raised many questions for nonprofits, and we’re fortunate that in a moment we’ll be hearing from a tax specialist with the IRS who will be sharing with us some of the lessons learned from the redesigned 990 and highlighting some mistakes to help us avoid those mistakes as well as to help us determine what each of our organizations should do in order to file a complete and accurate return.

As promised, here’s a transcript of Sarah Hall Ingram’s February 5 remarks. Sarah continues the tradition of the TE/GE Commissioner (and before that, the AC (EP/EO) being primarily an Employee Plans person. I think that reflects the fact that Exempt Organizations is #2 in the TE/GE hierarchy. I guess that’s better than being #3 (Government Entities).

As promised yesterday, here’s Cindy, Bobby, and Rob, with a cameo appearance by Sarah Hall Ingram.

IRS Trio Address Current EO Concerns

What follows are the February 5 remarks of the IRS’ Rob Choi, Director, EO Rulings & Agreements, Washington, Cindy Thomas, Manager, EO Determinations, Cincinnati, and Bobby Zarin, Director, Customer Education & Outreach, Washington, as delivered at the annual Joint Meeting of TE/GE Area Councils in Baltimore.