The Law of Tax-Exempt Organizations, 2021 Cumulative Supplement. Bruce R. Hopkins

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The Law of Tax-Exempt Organizations, 2021 Cumulative Supplement - Bruce R. Hopkins

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of Columbia and the state of Missouri.

      This 2021 cumulative supplement is the second supplement to accompany the twelfth edition of this book. The supplement covers developments in the law of tax‐exempt organizations as of the close of 2020.

      Enactment of what is informally known as the Tax Cuts and Jobs Act (TCJA) continues to reverberate through exempt organizations law and dominates the current developments scene. The Department of the Treasury and the IRS are issuing guidance (notices and final regulations) in the aftermath of the TCJA, such as in the context of the bucketing rule for computation of unrelated business taxable income, taxation of certain private colleges' and universities' endowment income, and taxation of the excess compensation of certain exempt organizations' executives. Fortunately, the law causing inclusion as unrelated business income items of the value of certain types of fringe benefits was repealed.

      The Treasury/IRS 2020–2021 Priority Guidance Plan, dated November 17, 2020, inventories the federal government's efforts to generate guidance in TCJA and other contexts. (As of the date of publication, the proposed regulations to accompany the donor‐advised funds statutory law have yet to emerge.) This guidance is summarized in this cumulative supplement.

      Another item of legislation, the Taxpayer First Act, brought more statutory law to the exempt organizations setting (although not nearly as dramatic as the TCJA). This statute instituted mandatory electronic filing of tax‐exempt organizations' returns, provided some relief for organizations that may otherwise have their exemptions revoked for nonfiling of returns, and established a statutory Independent Office of Appeals in the IRS. These new laws are also summarized in this cumulative supplement.

      The Office of Audit fiscal year 2021 Annual Audit Plan, which reflects the Treasury Inspector General for Tax Administration's (TIGTA's) current IRS audit priorities, released on October 6, 2020, includes these planned audits in the tax‐exempt organizations context: TIGTA's efforts to (1) review the Tax Exempt and Government Entities (TE/GE) Division's efforts to identify and examine exempt organizations with unreported or underreported unrelated business income tax; (2) assess whether the streamlined application for recognition of exemption results in fewer compliant tax‐exempt organizations; (3) review the IRS's policies and audit procedures to identify improper conduct by exempt organizations and determine whether the IRS has sufficient information to combat abuse and enforce federal tax laws; (4) determine the effectiveness of the Division's implementation of the Compliance Planning and Classification Unit to consolidate examination identification planning, assignment, and monitoring; (5) assess the IRS's implementation of the notice requirement for exempt organizations that have not filed an annual information return or notice for two consecutive years; and (6) provide various statistical information and data trends related to the Division.

      Courts, too, are contributing their fair share of law developments. This is particularly true in the realm of disclosure of donor and membership information. Several recent opinions on this subject, reflecting views on both sides of the issue, have been issued in recent months, such as the matter of providing Form 990, Schedule B, information to states in conjunction with fundraising regulation and disclosure of similar information in settings where free speech and privacy rights are implicated. Treasury has relieved most categories of exempt organizations of the burden of disclosing this type of information. These cases are summarized herein.

      An unfortunate subject is the interplay between the law of tax‐exempt organizations and the law of tax shelters (or, if you prefer, abusive tax schemes). Interest in this area continues to grow, leading to a new chapter of the book on the point, which is included with this supplement. In fact, just as this supplement was about to be submitted to the publisher, the U.S. Government Accountability Office, in early October 2019, issued a report on this subject (summarized in this supplement).

      I wish to thank my research assistant, Greg Gietzen, for his assistance in providing content material and in completing footnotes. My thanks also go to my senior editor, Brian T. Neill, and production editor, Caroline Maria Vincent, for their assistance and support in connection with creation of this supplement to accompany the book.

      Bruce R. Hopkins

      March 2021

      The Law of Tax‐Exempt Organizations, 12th Edition 2021 Cumulative Supplement is complemented by seven online resources. Please visit www.wiley.com/go/hopkins/lawoftaxexempt12e-2021supp to download the following tables in PDF format to use alongside the 12th edition.

       Cumulative Table of Cases

       Cumulative Table of IRS Revenue Rulings

       Cumulative Table of IRS Revenue Procedures

       Cumulative Table of IRS Private Determinations Cited in Text

       Cumulative Table of IRS Private Letter Rulings, Technical Advice Memoranda, and Counsel Memoranda

       Cumulative Table of Cases Discussed in Bruce R. Hopkins' Nonprofit Counsel

       Cumulative Table of IRS Private Determinations Discussed in Bruce R. Hopkins' Nonprofit Counsel

      Throughout this book, 14 books by the author (in some instances as coauthor), all published by John Wiley & Sons, are referenced as follows:

      1 IRS Audits of Tax‐Exempt Organizations: Policies, Practices, and Procedures (2008): cited as IRS Audits

      2 The Law of Fundraising, Fifth Edition (2014): cited as Fundraising

      3 The Law of Intermediate Sanctions: A Guide for Nonprofits (2003): cited as Intermediate Sanctions

      4 The Law of Tax‐Exempt Healthcare Organizations, Fourth Edition (2014): cited as Healthcare Organizations

      5 The New Form 990: Law, Policy, and Preparation (2009): cited as New Form 990

      6 Nonprofit Governance: Law, Practices & Trends (2009): cited as Nonprofit Governance

      7 The Nonprofits' Guide to Internet Communications Law (2003): cited as Internet Communications

      8 Planning Guide for the Law of Tax‐Exempt Organizations: Strategies and Commentaries (2004): cited as Planning Guide

      9 The Tax Law of Private Foundations, Fifth Edition (2018): cited as Private Foundations

      10 Starting and Managing a Nonprofit Organization: A Legal Guide, Seventh Edition (2017): cited as Starting and Managing

      11 The Tax Law of Associations (2006): cited as Associations

      12 The Tax Law of Charitable Giving, Sixth Edition (2021): cited as Charitable Giving

      13 The Tax Law of Unrelated

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