Priv. Ltr. Rul. 202001108.25 497.3 See § 7.14(b).
26 527.1 That is, tax exemption by reason of IRC § 501(a) as an entity described in IRC § 501(c)(3).
27 527.2 See § 7.6(b)(viii), note 152.
28 527.3 See § 20.5(c)(i). Consequently, a dual‐status governmental entity may wish to relinquish its IRC § 501(c)(3) status (see § 26.16, text accompanied by notes 275–279).
29 572 IRC §§ 1400Z‐1, 1400Z‐2, added by the Tax Cuts and Jobs Act, Pub. L. No. 115‐97, 115th Cong., 1st. Sess. (2017), § 13823. These zones and funds are not necessarily inherently charitable in nature but involve nonprofit organizations and involve efforts that overlap with the concept of charity in economic development (see § 7.16(e)).
30 573 IRC § 1400Z‐1(a). The term low‐income community is defined in IRC § 45D(e).
31 574 IRC § 1400Z‐1(b).
32 575 IRC § 1400Z‐2(a).
33 576 IRC § 1400Z‐2(b), (c).
34 577 IRC § 1400Z‐2(d)(1).
35 578 IRC § 1400Z‐2(d)(2). Final regulations were issued on December 19, 2020, providing guidance as to gains that may be deferred as a result of an investment in a qualified opportunity fund (T.D. 9889). This body of law addresses the time by which corresponding amounts must be invested in these funds and the manner in which investors may elect to defer specified gains, and includes rules for valuation of funds' assets and guidance on qualified opportunity zone businesses.
36 579 Katz, “How Philanthropy Can Help Opportunity Zones Ensure Widespread Economic Renewal,” 31 Chron. of Phil. (Issue 8) 34 (June 2019).
37 580 Id. at 35.
CHAPTER EIGHT Educational Organizations
§ 8.1 Federal Tax Law Definition of Educational
§ 8.3 Educational Institutions (a) Schools, Colleges, and Universities
§ 8.4 Instruction of Individuals
§ 8.1 FEDERAL TAX LAW DEFINITION OF EDUCATIONAL
p. 208. Insert as second complete paragraph:
An organization offering software that is free to download and edit was denied recognition of tax exemption as an educational organization, with the IRS writing that it is “merely provid[ing] open source web applications that can be used or modified by anyone and used for whatever purpose that individual sees fit.”10.1
§ 8.3 EDUCATIONAL INSTITUTIONS
(a) Schools, Colleges, and Universities
p. 212, first complete paragraph, first line. Delete This and insert According to the tax regulations, this.
p. 212, second complete paragraph, fourth line. Delete tax‐exempt; insert as an educational entity following status.
p. 212. Insert as third complete paragraph:
A court upended the foregoing requirements for qualification as an educational institution (and most of the other categories of public institutions), holding that the primary‐function test and the merely‐incidental test, as a matter of statutory construction, “exceed the bounds of authority” provided by the statute and thus are unlawful.45.1 The court based this finding on its conclusion that Congress “unambiguously chose not to include a primary‐function requirement in” the statutory definition of educational organization.45.2 That conclusion was, in turn, based on the fact that the “equivalent of that very requirement”45.3 appears in the tax law concerning public charity hospitals.45.4 The heart of this part of the analysis is the statutory construction rule that, in determining whether statutory language is plain and unambiguous, a court must read all parts of the statute together and give full effect to each part.45.5 The court might have come to a different decision if it had applied another construction rule, which is that the judicial interpreter is to consider the entire text, in view of its structure and of the physical and logical relation of its many parts.45.6 The problem is that this decision interprets the law of public charities in a way that enables an entity to qualify as a public charity by simply tangentially qualifying.45.7
§ 8.4 INSTRUCTION OF INDIVIDUALS
p. 217, note 103. Insert following existing text:
If this type of activity, however, is or becomes more in the nature of business promotion, however, the private benefit doctrine (see § 20.13) will preclude exemption (e.g., Priv. Ltr. Rul. 201927022).
§ 8.5 INSTRUCTION OF PUBLIC
p. 222, first complete paragraph. Insert as last sentence:
Somewhat similarly, an organization will not be considered by the IRS to be educational if more than an insubstantial amount of the entity's activities
