BCLP Charity Law

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Donor Advised Funds Scrutinized by the Treasury Department

February 21, 2012


At the request of Congress, the Department of Treasury recently issued a report on donor advised funds. Among other things, Congress had asked the Department of Treasury whether donations to a donor advised fund should be tax-deductible, whether such donations should be treated as donations to a public charity, and whether donor-advised funds should have a minimum distribution requirement. The Department of Treasury answered “yes” to the first two questions and “no” to the third, maintaining the status quo.

The full report can be read here: http://www.treasury.gov/resource-center/tax-policy/documents/supporting-organizations-and-donor-advised-funds-12-5-11.pdf.

IRS Exempt Organization Newsletter 2012-04

February 13, 2012


On February 8, the IRS released its Exempt Organization Newsletter, Issue Number 2012-04. Topics include the following:

  • Work Opportunity Tax Credit Now Available to Qualified Tax-Exempt Organizations that Hire Qualified Veterans
  • IRS Worker Classification Webinar Feb. 15th
  • StayExempt Redesign Improves User Experience
  • IRS Exempt Organization Newsletter 2012-03

    February 10, 2012


    On February 8, the IRS released its Exempt Organization Newsletter, Issue Number 2012-03. Topics include the following:

  • EO Releases FY 2011 Annual Report and FY 2012 Work Plan
  • Guidance on Requirements for Tax-Exempt 501(c)(29) Qualified Non-Profit Health Insurers
  • EO’s 2012 Graduate Student Summer Internship Applications Due March 2
  • EO Seeks Academic Hosts for Workshops for Small and Medium-Sized 501(c)(3) Organizations
  • LLCs and the Charitable Deduction

    LLCs and the Charitable Deduction

    February 7, 2012

    Authored by: Keith Kehrer

    Under the so-called “check the box regulations” a single member limited liability company (“SMLLC”) is disregarded for federal income tax purposes unless it elects to be taxed as a corporation.  Therefore, where a Section 501(c)(3) organization establishes a SMLLC that does not seek Section 501(c)(3) status or otherwise elect to be taxed as a corporation, the SMLLC is treated as a division of the 501(c)(3) organization for federal income tax purposes.   Strangely, the IRS has declined to rule whether a donation to a SMLLC qualifies as a deductible charitable contribution made to or for the use of a Section 501(c)(3) organization for purposes of Section 170.  The New York State Bar Association recently sent a report to the Treasury and the IRS in support of the position that contributions to such SMLLCs should be eligible for the charitable deduction.   I also believe that this is the appropriate treatment for federal income tax purposes and hope