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Planning and the Death of the Death Tax

On Wednesday afternoon the White House again proposed eliminating the so-called death tax as part of its tax reform plan, but the details remain sparse.  When pressed for specifics Director Cohn simply stated that with the implementation of the administration’s tax plan, the death tax would disappear.

The phrase “death tax” entered the popular lexicon by way of tax reformers wanting to summarize and caricature the several parts of the Federal transfer tax system.

What is the Death Tax?

The death tax could refer to the estate tax alone or to any combination of other taxes that grew out of the estate tax regime.  The modern estate tax was introduced in 1916.  In its current form it imposes a top rate of 40% on transfers above $5,490,000 per person made at death.

After the estate tax was instituted, savvy taxpayers quickly realized that a deathbed gift would avoid the estate

Comparison of Current Tax Rates, Trump Proposed Rates and Republican Blueprint Proposed Rates

While there is considerable uncertainty among wealth planners and tax professionals regarding how the incoming administration will impact the federal tax code, nearly everyone agrees that change is imminent. With that in mind, we have assembled this chart, which compares current tax rates with President-elect Donald Trump’s proposed tax plan, and the House Republicans’ Blueprint plan (released in June, 2016).  Click here.

Treasury Releases Final Program-Related Investment Regulations – Installment # 1

April 25, 2016


Treasury has released Final Regulations under Section 4944 of the Code providing additional guidance regarding program related investments (“PRIs”). Technically, a PRI is an investment by a private foundation (1) the primary purpose of which is to accomplish an exempt purpose, (2) no significant purpose of the investment is the production of income or the appreciation of property; and (3) no purpose of the investment is to influence legislation or to participate in, or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office.  Classification as a PRI is important because it means the investment will not be considered a jeopardizing investment and the investment is included as a qualifying distribution for purposes of the foundation’s annual minimum distribution obligation.

These Final Regulations provide several new examples of investments that will be classified as PRIs.  It is important to note, however, that these

Will the Senate Vote on Conservation Easements?

August 14, 2014


the-capitol-4-1225800-mThe America Gives More Act of 2014 (the “Act”) includes several provisions about charitable deductions. Among those provisions are changes to the donations of conservation easements that would make permanent temporary provisions that terminated as of December 31, 2013. The Act would permit individuals and corporations to continue to take a deduction of up to 50% of their adjusted gross income and permit individuals and corporations to carryover the aggregate amount of the deduction for up to 15 succeeding years.

The permanent provisions of Section 170 of the Internal Revenue Code only permit individuals and corporations to take a deduction up to 30% of their adjusted gross income and to carryover the aggregate amount of the deduction for up to 5 succeeding years.

The Act was introduced May 22, 2014 by

New York’s Non-Profit Revitalization Act of 2013 and Its Impact on Non-Profit Organizations

April 3, 2014


At the end of 2013, Governor Cuomo signed into law the Non-Profit Revitalization Act of 2013 (the “Revitalization Act”), which made significant changes to the way not-for-profit corporations will be required to operate in the State of New York.  The Revitalization Act presents the first significant changes in 40 years to the New York Not-for-Profit Corporation Law (the “NPCL”).  The changes focus on corporate governance reforms as well as updates to certain procedural rules. Most of the Revitalization Act’s provisions will go into effect on July 1, 2014.

IRS Provides Additional Guidance Regarding Reinstatement of Exempt Status

The IRS recently issued Revenue Procedure 2014-11, 2014-3 I.R.B. 411 (the “Revenue Procedure”) providing procedures for reinstating the tax-exempt status of organizations that have had their tax-exempt status automatically revoked under section 6033(j) of the Internal Revenue Code for failure to file required annual returns or notices for three consecutive years. The Revenue Procedure modifies and supersedes Notice 2011-44, 2011-25 I.R.B. 883 (the “Notice”).

In general, the Notice permitted certain organizations to request reinstatement of its tax-exempt status effective from the date of the organization’s automatic revocation (“retroactive reinstatement”) if the organization filed its application for reinstatement of tax-exempt status within 15 months of the revocation and proved reasonable cause for failing to file the required annual return or notice in each of the three consecutive years and over the entire consecutive three-year period. The Revenue Procedure liberalizes the criteria for requesting retroactive reinstatement for an organization that (i) was

IRS Releases Examples of Program-Related Investments

The IRS released proposed regulations under Section 4944 providing additional examples of program related investments (PRIs) (PRIs are excepted from the jeopardizing investment rules).  The proposed regulations add nine new examples intended to illustrate that a wider range of investments qualify as PRIs than the range currently presented in Treas. Reg. § 53.4944-3(b). The proposed regulations do not modify the existing regulations; rather, they provide additional examples that illustrate the application of the existing regulations.  Generally, the charitable activities illustrated in the new examples are based on published guidance and on financial structures described in private letter rulings.

New Regulations on Public Inspection of Letter Rulings

On February 28, the IRS issued final regulations amending sections 301.6104(a)-1(i) and 301.6110-1(a) to expressly allow public inspection of letter rulings denying or revoking an organization’s tax exempt status. The amendments are in response to Tax Analysts v. IRS, 350 F.2d 100 (D.C. Cir. 2003), in which the court held that including denials and revocations of tax exempt status “within the ambit of section 6104” and, thus, preventing disclosure, violated the plain language of section 6110. The final regulations are published in T.D. 9581, which can be read in full here.

Revised 990 Regulations

Revised 990 Regulations

November 5, 2011

Authored by: Nathan Boyce

Until recently, when an organization sought public charity status on its Form 1023 and received a favorable determination letter from the Internal Revenue Service recognizing it as exempt under Section 501(c)(3) of the Code, its public charity status (if granted) would be for a five-year “advance ruling period”. After this advance ruling period, the organization would make a separate filing to the IRS to establish public charity status based on satisfaction of one of the Support Tests. On September 7, 2011, final regulations were issued that change the timing and process of determining public charity status.  A brief description of the changes can be read here.