Exempt Organizations News Flash: Priority Guidance Plan

On August 9, 2013, the Treasury Department and the Internal Revenue Service released their 2013-2-14 Priority Guidance Plan ("PGP"), which lists the 324 guidance projects that will be priorities for the allocation of resources during the fiscal year ending in June 2014. Twelve of the guidance projects described in the PGP are focused on exempt organizations:

1. Revenue Procedures updating grantor and contributor reliance criteria under I.R.C. §§ 170 and 509.
2. Revenue Procedure to update Revenue Procedure 2011-33 for EO Select Check.
3. Guidance under § 501(c)(4) relating to measurement of an organization's primary activity and whether it is operated primarily for the promotion of social welfare, including guidance relating to political campaign intervention.
4. Final regulations under I.R.C. §§ 501(r) and 6033 on additional requirements for charitable hospitals as added by § 9007 of the ACA. (Proposed regulations were published on June 26, 2012 and April 5, 2013).
5. Additional guidance on I.R.C. § 509(a)(3) supporting organizations.
6. Guidance under § 4941 regarding a private foundation's investment in a partnership in which disqualified persons are also partners.
7. Final regulations under § 4944 on program-related investments. (Proposed regulations were published on April 19, 2012).
8. Regulations regarding the new excise taxes on donor advised funds and fund management under I.R.C. § 4966 added by § 1231 of the Pension Protection Act of 2006.
9. Regulations under I.R.C. §§ 6011 and 6071 regarding the return and filing requirements for community health needs assessments failures by charitable hospitals as added by § 9007 of the ACA.
10. Regulations under I.R.C. § 6033 on returns of exempt organizations.
11. Final regulations under I.R.C. § 6104(c). (Proposed regulations were published on March 15, 2011).
12. Final regulations under I.R.C. § 7611 relating to church tax inquiries and examinations. (Proposed regulations were published on August 5, 2009).

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Many of these projects are continued from the 2012-2013 Priority Guidance Plan. The guidance under section 501(c)(4) has likely been added in reaction to the recent investigations into the Service's review of political activities by section 501(c)(4) organizations, and suggests that guidance is underway. The reason for prioritizing guidance under section 4941 with respect to partnership investments is less obvious, but the Service has been struggling in recent years with such questions as when a private foundation's investment in a partnership constitutes a sale or exchange prohibited because of disqualified persons' interest in that partnership.

This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.