Final Regulations on College Investment Income Excise Tax Issued

• Published date: 01 November 2020
• DOI: http://doi.org/10.1002/npc.30783
• Date: 01 November 2020

THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

FINAL REGULATIONS

ON COLLEGE

INVESTMENT INCOME

EXCISE TAX ISSUED

Just as this issue was going to publication, the Department of the Treasury

and the IRS issued final regulations concerning the excise tax applicable to the net

investment income of certain private colleges and universities (IRC § 4968) (T.D.

9917). These regulations in their proposed form are summarized in the September

2019 issue. The final version of these regulations, issued on September 18, will be

summarized in next month’s issue. [11.9(b)] ◆

SENATE FINANCE COMMITTEE ISSUES

REPORT ON SYNDICATED CONSERVATION

EASEMENTS

A bipartisan investigation report, titled “Syndicated Conservation-Easement

Transactions,” was issued by the Senate Finance Committee on August 25 (S.

Prt. 116-44). This 183-page document discusses the committee’s findings derived

from its investigation launched in early 2019 (see the June 2019 issue). The report

states that the documents gathered by the committee “confirm that syndicated

conservation-easement transactions appear to be highly abusive tax shelters.”

According to IRS estimates, between 2010 and 2017 these transactions gen-

erated $26.8 billion in charitable deductions for the investors. These deductions

collectively lowered the “investors’” federal income taxes by approximately $10.6

billion. The IRS identified 169 partnership vehicles for this investment activity in

2015, 249 in 2016, and 244 in 2017. The agency put the tax community on

notice in late 2016 that it considers these transactions to be abusive tax shelters

(see the March 2017 issue). The IRS, the report states, is auditing or planning to

audit 84 percent of these partnerships.

It is said that the transactions examined in this report “appear to be nothing

more than retail tax shelters that let taxpayers buy tax deductions at the end of

any given year, depending on how much income those taxpayers would like to © 2020 Wiley Periodicals LLC

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DOI:10.1002/npc

Analysis of current developments in tax

and related law for nonprofit organiza-

tions and their professional advisors.

Volume 37 Number 11

November 2020

Also in This issue...

ABA Tax Section Submits

Comments on Proposed Group

Exemption Rules 2

Religious Organizations Criticize

Proposed Group Exemption Rules 3

IRS Rules No Property-Price

Manipulation in Self-Dealing Case 4

Foundation’s Grants for Electric

Buses Ruled in Conformity With

PF Tax Laws 5

Stock Transfers to DAF Ruled

Gifts, Not Taxable Redemptions 5

Revocation of Exemption

Upheld, Not Barred by Equitable

Estoppel Doctrine 6

Government’s Statements About

Easements Appraiser Held Not

Return Information Disclosures 6

Appellate Court Finds FEC Gift

Disclosure Rule Anemic, Upholds

Its Invalidation 7

Other Recent IRS Private Letter

Rulings 7

Other Developments 7