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Sep 28 2012
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Sara Beggs, Tax & Legal

IRS Reduces International Giving Regulations

By Sara Beggs, ASF

Sara BeggsWouldn’t it be great if your foundation could respond to the latest international crisis without loads of regulatory burdens? While expenditure responsibility rules are potentially less burdensome than some may think, it is still a process that is a significant barrier to international giving – especially for foundations with few or no staff.

But what if the government made it easier for your foundation to evaluate whether a non-U.S. NGO is equivalent to a U.S. public charity and you didn’t have to do expenditure responsibility at all? Impossible, you say? Well, as impossible as it may seem, that’s exactly what is happening. And, just to increase the shock value, it’s also not years or months down the road; it has already started. Continue reading →

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Jun 14 2012
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Andy Carroll, Grantmaking

What the Law Requires When Making Grants: The Answer May Surprise

By Andy Carroll, ASF

Many people say the U.S. government imposes too many regulations and too much paperwork on our economy. Although everyone doesn’t feel this way, it’s a pretty common refrain.

One arena very free of government requirements is foundation grants to public charities. Many people who work in foundations, and many professional advisors to foundations—attorneys, accountants, and consultants, are not aware of this freedom.

Project Streamline, a collaborative effort between grantmaker and grantee associations, is trying to get the word out. A few years ago, Project Streamline worked with legal experts to find out exactly what the IRS requires private foundations to do when making grants.

The answer might be shocking.

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May 31 2012
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Tax & Legal, Thomas F. Blaney

IRS Announces 2012 Exempt Organizations Work Plan

By Thomas F. Blaney, CPA, CFE

Recently, the Internal Revenue Service (IRS) announced the areas within an exempt organization that they will be “deploying resources” (auditing) for 2012. The IRS is focusing their efforts on any international transactions. They will continue to examine exempt organizations that have offices or activities overseas.

Private foundations that perform international grantmaking, invest “off shore,” or maintain ownership of a foreign bank account may be subject to these examinations.

The IRS will review a private foundation’s operations to ascertain:

  • Whether the foundation maintains adequate books and records to ensure assets are used for charitable purposes,
  • Whether the foundation has maintained proper discretion and control over funds that have left the United States,
  • Whether the foundation has met all filing requirements, and
  • How foreign operations or grantmaking furthers the foundation’s exempt purpose.

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Apr 25 2012
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Ruth Masterson, Tax & Legal

A Caution About the IRS Auto-Revocation List

By Ruth Masterson, ASF

The Auto-Revocation List is an official IRS record of organizations that have lost their exempt status for failing to file required annual tax returns for three consecutive years.

It’s important for private foundations to check this list to make sure grant applicants don’t appear on it. If a prospective grantee is on the list, grants to that organization cannot be counted as a qualifying distribution without exercising expenditure responsibility.

We offer an additional caution: Organizations will not be automatically deleted from the list, even if they successfully reapply for exemption and are reinstated as tax exempt. The IRS has stated that the list is an historical record of organizations whose tax-exempt status has been revoked for non-filing. The IRS will only remove an organization’s name from the list if they are provided with documentation that the organization was added to the list in error.

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