IRS Updates Inflation Adjustments for 2020

Published date01 January 2020
Date01 January 2020
Bruce R. Hopkins’ Nonpr ofit Counsel DOI:10.10 02/n pc
Contrary views came from the End Citizens United
Action Fund, by letter dated November 4. From this per-
spective, “[t]ransparency is critical to a democracy that’s
open and accountable to the people.” The fund wrote
that “[n]o longer requiring politically-active nonprofit
organizations to disclose their major donors to the IRS
will undermine this core tenet of our political system and
make it easier for unscrupulous organizations to accept
and spend dark money and illegal foreign contributions
on our elections without oversight or consequence.”
The IRS published annual inflation adjustments for tax
provisions for 2020 (Rev. Proc. 2019-44). Here are the
pertinent items:
An exception from unrelated business income taxa-
tion involving low-cost articles is applicable with
respect to articles with a cost of no more than
$11.20. [25.2(j)]
The $5, $25, and $50 guidelines for disregarding
the value of insubstantial benefits received from a
donor in return for a fully deductible income tax
charitable contribution are $11.20, $56, and $112.
[Appendices D–F]
The annual per-person, -family, or -entity dues limita-
tion to qualify for the reporting exception regarding
certain exempt organizations with nondeductible
lobbying expenditures is $119. [22.6(a)]
The limitation regarding the exemption of annual
dues required to be paid by a member to an exempt
agricultural or horticultural organization is $171.
This revenue procedure also includes the tax-rate
tables, the standard deduction amount (e.g., $24,800
for married individuals filing jointly), and the gift tax
exclusion ($15,000).
The US Court of Appeals for the Tenth Circuit, by
decision dated October 25, held that (1) a claimed
charitable deduction for a gift of land improvements to
a family ministry was not allowable because the donors
did not own the property involved; (2) claimed charitable
deductions were not allowable because the substantia-
tion requirements were not met, in that services were
provided and not disclosed; (3) a claimed charitable
deduction for a gift of a tractor mower was not allow-
able because the donors did not establish reasonable
cause for failure to comply with substantiation and
appraisal requirements; (4) a deduction for a gift of the
donor’s personal residence was not allowable because
the donors did not comply with the requisite appraisal
requirements; and (5) the donors involved are liable for
the 20-percent accuracy-related penalty (IRC § 6662(a))
(Presley v. Commissioner). This decision affirmed US Tax
Court findings (opinion referenced in the December
2018 issue). [3.1(c), 3.2, 10.14(a), 21]
The US Court of Appeals for the Ninth Circuit, on
November 12, denied the petition for a rehearing en banc
in a case concerning government agencies’ promulgation
of regulations and courts’ review of them (Altera Corpo-
ration & Subsidiaries v. Commissioner). Reversing the US
Tax Court, a Ninth Circuit majority upheld the validity of a
Treasury regulation. Three judges dissented in connection
with the petition denial, finding the regulation at issue
the “epitome of arbitrary and capricious.” A discus-
sion of this case, from the tax-exempt organizations
law perspective, is in the October and November 2018
Quote of the Month: The letter accompanying the new
National Philanthropic Trust report on donor-advised
funds (see the first article in this issue) states that, for the
ninth consecutive year, “there was growth in all key met-
rics [concerning DAFs] — number of individual donor-
advised funds, total grant dollars from donor-advised
funds to charitable organizations, total contributions to
donor-advised funds and total charitable assets in them.”
Each article in the newsletter on a tax-exempt organizations law topic ends with a citation to the appropriate chapter(s) or
subchapter(s) in Hopkins, The Law of Tax-Exempt Organizations, Twelfth Edition (Wiley, 2019). This is done to provide ready access
to additional and background information concerning these articles. For example, underlying information concerning the first article
in this issue is available in Chapter 11 § 8 of the book; thus, the citation is referenced as [11.8]. Likewise, each article in the news-
letter on a charitable giving law topic ends with a citation to the appropriate chapter(s) or subchapter(s) in Hopkins, The Tax Law of
Charitable Giving, Fifth Edition (Wiley, 2019 cumulative supplement). For example, underlying information concerning the second
article in this issue is available in Chapter 9 § 31 of the book; thus, the citation is referenced as [9.31].
This newsletter is a stand-alone publication. An inventory of articles in the newsletter since its inception in 1983, and a subject mat-
ter index, as well as an index of the court opinions, IRS revenue rulings and procedures, IRS technical advice memoranda, and IRS
private letter rulings discussed in the newsletter, are available at For those who have the books, the
newsletter also provides monthly updates. Both books are annually supplemented. Questions concerning nonprofit law develop-
ments in general may be sent to Also, a comprehensive summary of nonprofit law is avail-
able in the Bruce R. Hopkins Nonprofit Law Library, an e-book published by Wiley. Follow BRHopkins_NPLaw on Twitter.
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