Other Developments

• DOI: http://doi.org/10.1002/npc.30372
• Date: 01 September 2017
• Published date: 01 September 2017

Bruce R. Hopkins’ NONPROFIT COUNSEL

September 20178THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

Bruce R. Hopkins’ Nonprofit Counsel DOI:10.1002/npc

Additional information about this case is available

in documents filed in Chronic Disease Fund, Inc. v. US

(D.N.J.). A petition to quash a third-party summons states

that the CDF operates its co-pay program in accordance

with guidelines adopted by the Department of Health

and Human Services, Office of Inspector General. These

guidelines allow operation of these programs only by tax-

exempt charitable organizations. The petition states that

the unresolved issue in the case is whether the program

“accomplished a charitable mission or whether it conferred

an impermissible private benefit on the private pharmaceu-

tical companies whose drugs were purchased through” the

program and who are donors to the CDF. Pending before

the IRS is a request for technical advice. [20.12(a)] ◆

OTHER DEVELOPMENTS

◆Final and temporary regulations have been issued that

include a revised due date for Form 990 series returns (T.D.

9821). The regulations provide for a six-month extension

of time to file, assuming the filing of the requisite applica-

tion, following the six-month automatic extension of time

to file (IRC § 6081). This change was mandated by enact-

ment of the Surface Transportation and Veterans Health

Care Choice Improvement Act of 2015. These regulations

took effect on July 20. [28.2(a)(iv)]

◆The Office of Inspector General, Federal Election

Commission, launched an investigation into whether

any FEC employees played any role in connection with

the allegations of targeting by the IRS of political groups

based on the political beliefs. In a report dated March 3

but not made public until mid-July, the OIG stated that

it “found no evidence of communications between FEC

employees and the IRS for the purpose of targeting tax

exempt political organizations for political reasons.”

Similarly, this investigation “found no evidence that any

statute, regulation, or FEC policy or procedure was vio-

lated by agency [FEC] personnel.” [26.1(j)]

◆By letter dated July 13, Commissioner of Internal

Revenue John Koskinen provided Sen. Ron Wyden, rank-

ing member of the Senate Committee on Finance, with

interim data in connection with disclosures the IRS has

received in response to the notice identifying certain

syndicated conservation easement transactions as listed

transactions (notice summarized in the March issue).

The commissioner stated that the IRS had, as of June 1,

processed 104 of the 200 Reportable Transaction Dis-

closure Statements (Form 8886) received. Of these 104

disclosures, 40 reported the amount of the investment

and the amount of the claimed contribution deduction.

The aggregate contribution deduction claimed on these

40 disclosures was said to be $217,067,598. The average

contribution deduction from this preliminary analysis was

“9 times the amount of the investment in the transac-

tion (computed by excluding few outlier disclosures that

would otherwise have skewed the result higher). The

commissioner added that “[o]nce we compile and analyze

all information from the disclosures, we intend to identify

the syndication transactions that pose the most compli-

ance risk and refer them for examination.” [28.18(d), (e)]

Quote of the Month: “None of the funds made avail-

able by this Act may be used by the [IRS] to make a

determination that a church, an integrated auxiliary of a

church, or a convention or association of churches is not

exempt from taxation for participating in, or intervening

in, any political campaign on behalf of (or in opposition

to) any candidate for public office unless

(1) the Commissioner of Internal Revenue consents to

such determination;

(2) not later than 30 days after such determination,

the Commissioner notifies the Committee on Ways

and Means of the House of Representatives and the

Committee on Finance of the Senate of such deter-

mination; and

(3) such determination is effective with respect to the

church, integrated auxiliary of a church, or convention

or association of churches not earlier than 90 days after

the date of the notification under paragraph (2).”

This is § 116 of the House Appropriations Committee

FY2018 Financial Services and General Government appro-

priations legislation wending its way through Congress. ◆

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, Eleventh Edition (Wiley 2017 cumulative supplement). 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 26 § 1(h), and thus the citation is referenced as [26.1(h)]. Likewise,

each article in the newsletter 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 2017 cumulative supplement). For example, underlying information

concerning the second article in this issue is available in Chapter 21 §§ 4 and 5, and thus the citation is referenced as [21.4, 21.5].

This newsletter is a stand-alone publication. An inventory of articles in the newsletter since its inception in 1983, and a subject

matter 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 www.nonprofitlawcenter.com. For those who have the

books, the newsletter also provides monthly updates. Both books are annually supplemented. Questions concerning nonprofit law

developments in general may be sent to brucerhopkins@brucerhopkinslaw.com. Also, a comprehensive summary of nonprofit law

is available in the Bruce R. Hopkins Nonprofit Law Library, an e-book published by Wiley. Follow BRHopkins_NPLaw on Twitter.

The newsletter has a dedicated website. Please visit www.hopkinsnonprofitcounsel.com.