Treasury/IRS Issue Final Form 1023‐EZ Regulations

• Published date: 01 September 2017
• DOI: http://doi.org/10.1002/npc.30361
• Date: 01 September 2017

THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

TREASURY/IRS ISSUE

FINAL FORM 1023-EZ

REGULATIONS

The Department of the Treasury and the IRS issued final regulations, which

are effective as of June 30, that allow the IRS to adopt a streamlined application

process that eligible organizations may use in applying for recognition of tax

exemption as a charitable entity. This concerns Form 1023-EZ, as to which final

and temporary regulations were issued in 2015. The unveiling of Form 1023-EZ is

described in the June 2014 issue.

Also in 2014, the IRS issued a notice of proposed rulemaking, cross-referenc-

ing the temporary regulations. Comments were not submitted as to the proposal;

thus, a public hearing was not held. In the preamble to the final regulations just

issued, it is said that the IRS “continues to consider improvements to Form 1023-

EZ based on its own experience and informal comments received from the public

and other stakeholders on the form, including whether to require applicants to

submit a brief statement of actual or proposed activities.” Treasury and the IRS

concluded that the regulations, as proposed, are “sufficiently flexible” to allow

this type of revision to the form at a future date. Thus, the final regulations are the

proposed regulations, adopted without substantive change. [26.1(h)] ◆

DEDUCTION OF $33 MILLION LOST

BECAUSE OF BLANK LINE ON FORM 8283

The US Tax Court held, on July 3, that a limited liability company is not entitled to

a charitable deduction of a remainder interest in property in the claimed amount of

$33 million, inasmuch as the line on Form 8283 requesting the amount of the donor’s

basis in the gifted property was left blank (RERI Holdings I, LLC v. Commissioner).

Facts

A limited liability investor company paid $2.95 million to acquire a remainder

interest in property. The document that created the remainder interest provided

covenants intended to preserve the value of the property; it also limited the rem-© 2017 Wiley Periodicals, Inc.

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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 34 Number 9

September 2017

Also in This issue...

Third Appellate Court Upholds

IRS on Mortgage Subordination

Rule for Gifts of Easements 3

Supreme Court: Discrimination

Against Church in State Grant

Effort Violation of Free Exercise

Clause 3

Charitable Deduction Denied

Because of Donor’s Retained

Right to Transfer Gift Property

to Another Charity 4

Organization Denied Exemption

as Not Lessening Government

Burdens 5

Organization Denied Exemption

for Providing Services

to Members 6

Issue Advocacy/Political Activity

Test Held Constitutional 6

Case Study on How Not

to Go About Deductible Giving 7

Set-Aside Corner 7

IRS Examining Co-Pay

Assistance Charity 7

Other Developments 8