IRS Leadership on Exempt Organizations

Current Climate for Charities - On October 22, 2007, Steven T. Miller, Commissioner, Tax Exempt and Government Entities, addressed the Independent Sector focussing on the current climate for charities.

IRS Role in Evolving Charitable Sector - On November 10, 2007, Steven T. Miller, Commissioner, Tax Exempt and Government Entities, discussed the IRS role in an evolving charitable sector.

Also: New Compliance Guides for 501(c)(3) Public Charities and Private Foundations Issued - These specialized publications for public charities and private foundations provide an overview of activities that could jeopardize exempt status as well as information on recordkeeping, reporting and disclosure compliance requirements.

Tax Considerations in Charitable Auctions

Have you ever attended a charity auction only to have the well-meaning auctioneer rally the audience by saying, "Come on everybody, it's deductible!" In this updated article, Ronnie C. McClure, Ph.D., CPA, suggests donors, bidders, and charitable organizations may be in for a surprise. Although auctions probably fall more under the category of "spontaneous" than "planned" giving, there are several interesting tax facts you might want know before the next gavel falls.

IRS Announces Priority Guidance Plan for 2007-2008

IRS has announced its priority issues for the next year, which include several topics related to nonprofits: forthcoming regulations on the new Form 990, the e-Postcard, new requirements for supporting organizations under the Pension Protection Act of 2006, and revocation standards for nonprofits that engage in excess benefit transactions. A full listing of the 2008 IRS agenda is available on their website.

ALSO: Hearing to Examine Whether Charitable Organizations Serve the Needs of Diverse Communities The U.S. House Ways and Means Subcommittee on Oversight explored the extent to which nonprofits are adequately serving diverse communities at a hearing held on September 24, 2007. Witnesses offered examples of their organizations' efforts, while also acknowledging that nonprofit services aren't sufficient to fill many community needs. Testimony will be transcribed and available for review on the House Ways and Means Subcommittee on Oversight website.

Payout Requirements for Type III Supporting Organizations

The IRS and Treasury have announced proposals regarding the payout requirements for Type III supporting organizations that are not functionally integrated, the criteria for determining whether a Type III supporting organization is functionally integrated, the modified requirements for Type III supporting organizations that are organized as trusts, and the requirements regarding the type of information a Type III supporting organization must provide to its supported organization(s) to demonstrate that it is responsive to its supported organization(s). Full Text - Go to page 753

Online EIN Application

The IRS announced that taxpayers can request an Employer Identification Number (EIN) (necessary, for example, for a corporation, a trust, or other nonprofit organization) through a Web-based system that instantly processes requests and generates identification numbers in real time. IR-2007-161

Notice on Car Donations

The IRS has issued Notice 2007-70 which changes where charitable organization that receive gifts of qualified vehicles such as autos, airplanes, and boats with claimed values exceeding $500 are to file a completed Forms 1098-C and 1096 for years ending on or after December 31, 2008. See Instructions.

New Exempt Organization Determination Procedures

The IRS has issued Rev. Proc. 2007-52, which provides updated procedures for issuing determination letters and rulings on exempt status under sections 501 and 521 of the Internal Revenue Code, effective July 23, 2007. These new procedures will be updated annually.

New Group Ruling Letter for Catholic Entities Available

The annual group ruling letter for Catholic Entities has been issued and is available on the internet at the following address: http://www.usccb.org/ogc/2007GroupRulingMemo.pdf The cover letter by the USCCB Office of General Counsel provides a helpful update on changes in tax law in 2007.

New Exempt Status Determination Procedures

Revenue Procedure 2007-52 sets forth the procedures for issuing determination letters and rulings on exempt status of organizations under section 501 and 521 of the Code. It also applies to revocation and modification of determination letters or rulings, and provides guidance on the exhaustion of administrative remedies for purposes of declaratory judgment under section 7428. It will be published in IRB 2007-30 dated July 23, 2007.

New Information Reporting Requirement for Many Nonprofits

The IRS is mailing educational letters this month to more than 650,000 small tax-exempt organizations that may be required to submit a new annual notice, Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ. Exempt organizations with receipts of less than $25,000 will need to file the e-Postcard in 2008. Get more information in news release IR-2007-129.