Other Developments

Published date01 February 2021
Date01 February 2021
Bruce R. Hopkins’ Nonpr ofit Counsel DOI:10.10 02/n pc
certain exempt organizations with nondeductible
lobbying expenditures is $120. [22.6(a)]
The limitation regarding the exemption of annual dues
required to be paid by a member to an exempt agri-
cultural or horticultural organization is $173. [25.2(l)]
This revenue procedure also includes the tax rate
tables, the standard deduction amount (e.g., $25,100
for married individuals filing jointly), and the gift tax
exclusion ($15,000).
The IRS has started sending letters to taxpayers who
may need to take additional actions related to Qualified
Opportunity Funds. More specifically, taxpayers who at-
tached or indicated they attached a Form 8996 to their
return may receive a letter letting them know that, if
they intended to self-certify with respect to a QOF, they
may need to take additional action to meet the annual
self-certification requirement.
To correct a self-certification for 2018 as to a QOF,
these taxpayers should file an amended tax return or
an administrative adjustment request. If an entity that
receives the letter fails to take action to self-certify as a
QOF, the IRS may refer its tax account for examination.
Investors who made an election to defer tax on eligible
gains invested in that entity may also be subject to exam-
ination for an invalid election.
Additionally, taxpayers may receive a letter notifying
them that they may not have properly followed the
instructions for Form 8949 (sales and other dispositions
of capital assets) or do not appear to have an eligible
gain that would enable them to make a valid deferral
election for gains invested in a QOF.
If these taxpayers intended to make a valid deferral
election, they can file an amended return or an administra-
tive adjustment request. Failure to act will mean those who
received the letter may not have a qualifying investment
in a QOF and thus the IRS may refer their tax accounts
for examination. This may result in letter recipients owing
taxes, interest, and penalties on gains that were not prop-
erly deferred. (IR-2020-274 (December 6) [7.17]
As noted in last month’s issue, the trial in the Fidelity
Charitable Gift Fund case ended on December 4. Another
summary of the trial proceedings is in the December 7
print issue of Bloomberg Law’s Daily Tax Report. [11.8(b)]
The IRS Office of Chief Counsel addressed the method
by which the IRS applies the civil fraud penalty (IRC §
6663(a)) for partnerships, subject to the centralized
partnership audit regime, that participated in listed syn-
dicated conservation easement transactions. The answer:
the procedures are the same as those for establishing a
civil fraud against a partnership subject to the regime
generally, that is, through all facts and circumstances that
establish the willful intent to evade tax at the partnership
level (Chief Couns. Adv. Mem. 202044009).
The IRS, on November 19, released a revised version
of its Conservation Easement Audit Technique Guide
(Pub. 5464). The overall purpose of this guidance is to
summarize the general requirements for charitable con-
tributions and the specific requirements for contributions
of conservation easements. Included in the Guide is a
summary of examination techniques, an overview of the
process for valuing these easements, and a discussion of
applicable penalties. [9.7]
Each article in the newsletter on a tax-exempt organization’s 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, 2020 supplement). This is done to
provide ready access to additional and background information concerning these articles. For example, underlying information con-
cerning the first article in this issue is available in Chapters 12 § 3(b)(i), (iv) and 25 § 5 of the book; thus, the citation is referenced as
[12.3(b)(i), (iv), 25.5]. 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, 2014, 2020 cumulative supplement).
For example, information concerning the second article in this issue is available in Chapters 9 § 7 and 10 § 1 of the book.
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.brucerhopkinslaw.com. For those who have the books, the newslet-
ter 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. Other law resources are referenced at brucerhopkinsbooks.
com. Follow BRHopkins_NPLaw on Twitter.
The newsletter has a dedicated Web site. Please visit wileyonlinelibrary.com/journal/npc.
Quote of the Month: The Internal Revenue Manual
was revised, by a Manual Transmission dated December
11, in connection with the section concerning use of
summons (25.5.8). This revision states that the “desig-
nated official to approve a church tax inquiry under IRC
[§] 7611(a) is the Commissioner, TEGE” ( It is
not known at this time if this development is intended to
trump the existing regulation project (summarized in the
October 2009 issue) or whether this amendment of the
IRM will be reinforced by a regulation. [27.6(c)]

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