Final Regulations Issued Concerning Social Welfare Organizations' Notice Requirement

• DOI: http://doi.org/10.1002/npc.30633
• Published date: 01 September 2019
• Date: 01 September 2019

Bruce R. Hopkins’ NONPROFIT COUNSEL

September 2019 3

THE LAW OF TAX-EXEMP T ORGANIZATIONS MONTHLY

Bruce R. Hopkins’ Nonpr ofit Counsel DOI:10.10 02/n pc

successful implementation of the priorities specified by

Congress in the act; (2) prioritize taxpayer services to

ensure that all taxpayers “easily and readily” receive the

assistance they need; (3) streamline the structure of the

IRS, including minimizing duplication of services and

responsibilities within it; (4) best position the IRS to com-

bat cybersecurity and other threats to the agency; and

(5) address whether the Criminal Investigation Division

of the IRS should report directly to the IRS commissioner.

Customer Service Strategy

Within one year, Treasury is to submit to Congress a

written comprehensive customer service strategy for the

IRS. This strategy must include a plan to provide assistance

to taxpayers that is secure and designed to meet reason-

able taxpayer expectations, and adopts appropriate best

practices of customer service provided in the private sec-

tor, including online services, telephone call-back services,

and training of employees providing customer services.

This strategy must also include (1) a thorough assessment

of the services the IRS can co-locate with other federal

services or offer as self-service options and (2) proposals

to improve IRS customer service in the short term (cur-

rent and following fiscal year), medium term (three to

five fiscal years), and long term (about 10 fiscal years).

Management of Information Technology

The act created the position in the IRS of a chief

information officer, to be appointed by the IRS commis-

sioner. This CIO is to develop, implement, and maintain

information technology for the IRS. The CIO is also

required to develop and implement a multiyear strategic

plan for the information technology needs of the IRS.

Cybersecurity and Identity Protection

The Treasury Department is directed to work collab-

oratively with the public and private sectors to protect

taxpayers from identity theft tax refund fraud.

Treasury is to ensure that the Electronic Tax Admin-

istration Advisory Committee studies and makes recom-

mendations to the department regarding methods to

prevent this type of fraud.

Treasury is authorized to participate in an informa-

tion-sharing and -analysis center to centralize, stan-

dardize, and enhance data compilation and analysis to

facilitate sharing actionable data and information with

respect to this type of fraud.

Independent Office of Appeals

The act establishes within the IRS an Internal Rev-

enue Service Independent Office of Appeals. This office

will be under the supervision of a chief of appeals, who

will report directly to the IRS commissioner. The chief

must have experience and expertise in administration

of and compliance with the federal tax laws, a broad

range of compliance cases, and management of large

service organizations. The function of this office will be

to resolve federal tax controversies without litigation

on a basis that is fair and impartial to the government

and the taxpayer, promote a consistent application and

interpretation and voluntary compliance with the federal

tax laws, and enhance public confidence and efficiency

of the IRS. [2.2(a)] ◆

FINAL REGULATIONS ISSUED

CONCERNING SOCIAL

WELFARE ORGANIZATIONS’

NOTICE REQUIREMENT

Final regulations (T.D. 9873) were issued on July 19

that flesh out the law, added in 2015 (summarized in the

March 2016 issue), requiring organizations to notify the

IRS of their intent to operate as tax-exempt social welfare

entities. These regulations are not substantially differ-

ent from those issued in proposed and temporary form

(summarized in the September 2016 issue). Three sets of

comments were received on the proposals; one was with-

drawn. A public hearing was neither requested nor held.

Generally, a social welfare organization must, no later

than 60 days after its establishment, notify the IRS that it

is operating as an IRC § 501(c)(4) entity (IRC § 506). There

are additional first-year reporting requirements. This

notice is provided by means of Form 8976. [26.13] ◆

FINAL REGULATIONS ISSUED

CONCERNING CHARITABLE

DEDUCTIONS AND SALT CAP

As noted last month, the Department of the Trea-

sury, on June 11, issued final regulations governing the

availability of federal income tax charitable contribution

deductions where donors receive or expect to receive a

corresponding state or local tax credit (T.D. 9864).

Essence of Regulations

The general rule in these regulations is that if a per-

son makes a payment or transfers property to or for the

use of a charitable organization, the amount of the per-

son’s charitable contribution deduction must be reduced

by the amount of any state or local tax credit that the

person receives or expects to receive in consideration for

the payment or transfer (Reg. § 1.170A-1(h)(3)(i)).

This rule does not apply to any payment or transfer

of property where the amount of state and local tax

credits received or expected to be received is no more

than 15 percent of the payment or value involved (Reg.

§ 1.170A-1(h)(3)(vi)).