photo-1454165804606-c3d57bc86b40The February 15, 2017 deadline for nonprofit organizations in California seeking to initially obtain or renew exemption from property taxes is quickly approaching, and there are changes to the reporting requirements if your organization allows third parties to use your property.

An increased concern amongst many tax-exempt organizations is how to report use of their property by private persons or non-exempt organizations.

Continue Reading Annual Filing for Welfare Exemption Due On or Before February 15th

On November 4, 2016, the IRS updated its Conservation Easement Audit Techniques Guide (CE Audit Guide) for the first time since March 15, 2012.

According to the IRS’s introduction on its Audit Techniques Guide website, Audit Techniques Guides (ATGs) are developed to help IRS examiners during audits by explaining issues and accounting methods within specific industries. ATGs are also meant to provide guidance to small business owners and tax professionals for tax planning purposes within those industries. However, each ATG contains a disclaimer that it is not “an official pronouncement of the law or position of the Service and cannot be used, cited, or relied upon as such.” This article will not explain the CE Audit Guide in depth, but rather discuss the specific updates made in November.

Continue Reading IRS Updates Conservation Easement Audit Techniques Guide

accountant-accounting-adviser-advisor-159804A new private ruling may be of great interest to clients with substantial real estate interests who wish to contribute one or more properties to a family foundation.  The ruling suggests that payment by the foundation to a property management entity controlled by the donor may be permissible under the personal services exception.

Continue Reading Private Ruling Exempts Property Management Services from Self-Dealing

The case of Salus Mundi Foundation et al v. Commissioner

Transferee LiabilityOn August 15, 2016, the Tax Court decided in Salus Mundi Foundation et al v. Commissioner, T.C. Memo. 2016-154, that two foundations were liable as transferees for a corporation’s unpaid federal tax liability after another foundation distributed to the foundations the proceeds of the sale of the corporation’s stock.

The history in this case involves a marital trust that initially owned all of the stock in a C corporation called Double-D Ranch.  Later, a portion of the stock was transferred to the Diebold Foundation in New York.  Subsequent to that, the Diebold Foundation in New York sold the stock and distributed the proceeds from the sale of Double-D Ranch stock to three foundations formed by the Diebold children, pursuant to a New York state-approved plan of dissolution.

Continue Reading Transferee Liability: The [Unlikely] Situation that your Nonprofit Receives a Charitable Gift with Expensive Tax Strings Attached

taxThe IRS Office of Chief Counsel recently released Information Letter 2016-0036 in response to questions regarding the taxation of crowdfunding revenue. In it the IRS concluded that crowdfunding revenue is taxable to the extent it is received in exchange for services or property.

Continue Reading Thinking of Crowdfunding Your Project? Beware – the Taxman Cometh

photo-1446482972539-0ed52b3e9520We have all been told at one point or another that we simply “can’t have it all.”  But for owners of recreational or agricultural land who desire to preserve the land, pass it down to their descendants as a legacy property, and achieve substantial tax savings, “(almost) having it all” is a possibility.  Enter, the conservation easement – a valuable tool that can bridge the divide between these often competing interests. Continue Reading Conserve Your Land, Preserve Your Estate: The Conservation Easement as a Land Use, Tax & Estate Planning Tool

photo-1460925895917-afdab827c52fIn recent years, private foundations increasingly have sought to incorporate socially responsible investing (“SRI”) mandates.  Some SRI mandates take the form of negative screens—e.g., screening out tobacco stocks.  Other SRI approaches are more proactive—e.g., a foundation focusing on disease eradication might invest in companies that develop vaccines.  However, there has been a view—accurate or not—that some socially responsible investments yield lower risk-adjusted financial returns than traditional investments (such investments are sometimes referred to as “concessionary”).

Accordingly, when a foundation engages in an SRI program, several legal issues arise.

Continue Reading IRS Notice Provides Support for Socially Responsible Investing by Private Foundations

A promise to give is not a guaranteed charitable gift.

smartphone-586903_1920In an open letter to their newborn daughter last December, Facebook CEO Mark Zuckerberg and wife Priscilla Chan announced they will eventually give 99 percent of their Facebook shares during their lives to a variety of important social causes.  Over the past several months, commentators have expressed both enthusiasm and concern with the manner in which the couple chose to commit their wealth to advancing these causes.  Continue Reading What Does the Chan Zuckerberg Initiative Mean for Modern Philanthropy?

tax-468440_1920In July of 2014, the Internal Revenue Service (IRS) introduced a shorter application form to help small charities apply for 501(c)(3) tax-exempt status more easily.  At that time, the Form 1023-EZ required a $400 user fee to be submitted with the application.

Effective July 1, 2016, the cost will drop to $275 for Form 1023-EZ filers, pursuant to recently issued Revenue Procedure 2016-32.

Continue Reading Form 1023-EZ Filers Benefit From Reduced Fee