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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Dispelling a Self-Dealing Myth

By Ruth Masterson, Exponent Philanthropy

One myth about self-dealing is the idea that identifying a prohibited self-dealing transaction relies on who benefits from the transaction.

Because that’s not the case.

If your private foundation is engaged in a transaction that you think is okay because the foundation benefits, or because the other party doesn’t benefit at all or at least not very much, then you’ll be wrong about self-dealing pretty often. Who benefits is simply not what the IRS looks at when determining whether something is self-dealing.

What is self-dealing, then? What does the IRS look for when imposing penalties?

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