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Information on fake charities; Revisions to Form 8976 registration system; Update to Revenue Procedure 75-50

June 27, 2019

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Beware of fake charities IRS cautions taxpayers on scams involving disasters, charitable causes andencourages taxpayers to donate to recognized charities to help disaster victims. IRS’ annual “Dirty Dozen” also lists a variety of common scams taxpayers may encounter.

Understanding Disaster Relief Tax Law and Contribution Deductibility The IRS offers two courses – Disaster Relief – Parts 1 and II – for charitable organizations providing disaster relief. Topics include how charities may provide disaster relief, deductibility of contributions and tax treatment of relief recipients. Organization leadership and volunteers should review the Tax-Exempt Organization Workshop that includes important information on the benefits, limitations and expectations of tax-exempt organizations.

Revisions made to IRS Online Registration System for 501(c)(4) Certification Organizations required to submit Form 8976, Notice of Intent to Operate Under Section 501(c)(4), will notice a new look and improved navigation at the Online Registration System for 501(c)(4)

New Regulations for Charitable Contributions in Exchange for State or Local Tax Credits

June 19, 2019

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The IRS has issued final regulations that address the question of whether a state or local tax credit should be treated as a return benefit, or quid pro quo, when received in return for making a charitable contribution. Under Reg § 1.170A-1(h)(3), the amount of a taxpayer’s charitable contribution deduction under section 170(a) is reduced by the amount of any state or local tax credit that the taxpayer receives or expects to receive in consideration for the taxpayer’s payment or transfer. An exception applies for taxpayers when the state and local tax credits received or expected to be received is 15 percent or less of the taxpayer’s payment or fair market value of the property transferred.

The new regulation also addresses whether state or local tax deductions received in return for making a charitable contribution should be treated as a return benefit. Unlike tax credits, however, state or local tax

Form 990-T Fiscal Year 2017 Corporate Filers Apply Blended Rate to Unrelated Business Taxable Income (UBTI) for Entire Taxable Year

June 7, 2019

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The IRS reminds Form 990-T Corporate Filers of new tax law provisions that could affect the tax rate applicable to their UBTI. Specifically, fiscal 2017 corporate filers should apply a blended rate to their UBTI for the entire 2017 taxable year, including any UBTI from amounts paid or incurred after December 31, 2017 that increase UBTI under new Section 512(a)(7).

The Tax Cuts and Jobs Act (TCJA) introduced a flat 21 percent corporate tax rate for tax years beginning after December 31, 2017. However, corporations with fiscal tax years beginning in 2017 and ending in 2018 calculate their tax by blending the rates in effect before 2018 with the rate in effect after 2017. An exempt organization that’s a corporation with a 2017 fiscal year calculates its tax liability by applying the pre-2018 rate and the post-2017 rate to the corporation’s taxable income for the entire tax year. It prorates