Universal Charitable Giving Act Introduced

Date01 February 2020
Published date01 February 2020
February 2020 7
Bruce R. Hopkins’ Nonpr ofit Counsel DOI:10.10 02/n pc
the 15th day of the fifth month after the tax-year-end.
Thus, Forms 990 and 990-PF with tax years ending July
31, 2020, or later must be filed electronically. Form 990
and 990-PF filings for tax years ending on or before June
30, 2020, may still be on paper. In the case of a short tax
year or certain other circumstances detailed in the 990 or
990-PF instructions, the IRS will continue to accept paper
filing, as its systems are not yet able to receive these
forms electronically.
Form 990-EZ
For smaller exempt organizations, the new law
allows a postponement (transitional relief). For tax years
ending on or before July 31, 2020, the IRS will accept
either paper or electronic filing of Form 990-EZ. For tax
years ending August 31, 2020, or later, Forms 990-EZ
must be filed electronically. (Generally, this annual infor-
mation return is filed by organizations with annual gross
receipts that are less than $200,000 and total assets at
tax-year-end less than $500,000.)
Forms 990-T and 4720
In 2020, the IRS will continue to accept paper forms
that are pending conversion into electronic format.
These include Form 990-T and 4720. The IRS plans to
have these returns ready for e-filing in 2021 (reporting
on tax year 2020).
Form 8872
The IRS will no longer accept paper Forms 8872
reporting on periods after 2019. Form 8872 report-
ing information for periods starting in or after January
2020, will be due electronically by political organizations.
(These include political parties, political action commit-
tees, and campaign committees of candidates for fed-
eral, state, or local office.) Among other requirements,
most exempt political organizations must file this form
semiannually, quarterly, or monthly. To file electronically,
the organization must have the username and password
it received from the IRS after electronically filing its initial
notice (Form 8871).
Form 1065
The annual information return for partnerships is
included in this e-filing mandate when filed by an apos-
tolic organization. [28.2, 28.7, 28.9]
The New York State Supreme Court, by decision dated
November 7, ordered President Donald Trump to pay
$2 million in restitution for spending Trump Foundation
money for political campaign purposes (People of the
State of New York v. Trump). The court stated that one
of Trump’s breaches of fiduciary duty occurred when he
“allow[ed] his campaign to orchestrate” a fundraising
event, “allowing his campaign, instead of the founda-
tion, to direct distribution of the funds, and using the
fundraiser and distribution of the funds to further Mr.
Trump’s political campaign” (see the analysis of this
lawsuit in the August 2018 issue). The court declined
to order payment of damages, because the funds were
ultimately distributed to charitable organizations.
The Office of the New York Attorney General, in a
December 10 press release, stated that the $2 million will
be distributed to eight different charities, amounting to
$250,000 for each of them. These charities are identified
in the release. The attorney general is quoted as saying
that “[c]harities are not a means to an end, which is why
these damages speak to the president’s abuse of power
and represent a victory for not-for-profits that follow
the law.”
The press release states that the president was forced
to reimburse the Trump Foundation in the amount
of $11,525 for sports paraphernalia and champagne
purchased at a charity gala, which was added to the
$1,797,598.30 in the foundation’s bank account. The
resulting $1,809,123.30 was recently transferred to the
eight charities, with each charity receiving a total of
The release also states that the president was
required to agree to 19 admissions, “acknowledging his
personal misuse of funds at the Trump Foundation, and
agreed to restrictions on future charitable service and
ongoing reporting to the Office of the Attorney General,
in the event he creates a new charity.” The settlement
“also included mandatory training requirements for
Donald Trump Jr., Ivanka Trump, and Eric Trump, which
the three children have already undergone.” Further, the
settlement required the foundation to “shutter its doors
last December and dissolve under court supervision.”
Rep. Mark Walker (R-North Carolina), on December
3 (Giving Tuesday), introduced legislation to provide a
charitable contribution deduction for nonitemizers —
labeled a “universal charitable deduction” (the Universal
Charitable Giving Act of 2019). This above-the-line
deduction would be up to one-third of the standard
deduction — about $4,000 for individuals and $8,000
for married couples.
In a statement, the congressman said that “[p]eople
not the government offer the best solutions to solve the

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