Write-Offs

October 31, 2002 | Read Time: 2 minutes

The IRS is seeking comments on its plan to substantially revise and streamline Form 1023 — the document that organizations file with the IRS when they seek tax-exempt status as charities or foundations — as well as the instructions for the form (Announcement 2002-92, Internal Revenue Bulletin 2002-41). Drafts of the tax agency’s proposed form and instructions are available at the IRS Web site at http://www.irs.gov/eo. One change: an extensive new introduction to the instructions that explains the legal requirements of tax-exempt groups. Comments may be sent by e-mail to tege.eo2@irs.gov by December 2.
The U.S. Court of Appeals for the Eleventh Circuit has upheld a ruling by the U.S. Tax Court that a Florida estate is not entitled to a charitable tax deduction for the remainder interest in a trust that was initially set up as a charitable remainder annuity trust, a popular form of planned giving (Estate of Melvine B. Atkinson, and Christopher J. MacQuarrie v. Commissioner of Internal Revenue, No. 01-16536). The Tax Court had concluded that the trust failed to operate properly, in part because it did not make required quarterly payments to a woman who set it up before she died.
The U. S. Senate went into recess until November 12 without taking up a package of tax and other proposals that, if enacted, would have a major impact on charities and donors. The measure, known as the Charity Aid, Recovery, and Empowerment (Care) Act of 2002, passed the Senate Finance Committee four months ago, but then stalled. Before any charity provisions were to become law, the Senate would have to work out differences with the House of Representatives, which passed a charity bill of its own last year.