Tuesday, November 9, 2021
We have been slow in blogging about the Treasury Department's 2021-2022 Priority Guidance Plan and the latest Tax Exempt & Government Entities Program Letter, in part because neither document tells us anything new. Given the pandemic-related backlog of returns and other matters the IRS is currently trying to resolve, this is not surprising. Nevertheless, it is to be hoped that future years will be more productive, especially if more funding is provided to the IRS.
Starting with the Priority Guidance Plan, for Exempt Organizations (page 7) it only repeats items from previous plans, some of which are getting quite dated:
- Guidance revising Rev. Proc. 80-27 regarding group exemption letters. Notice 2020-36 was published on May 18, 2020.
- Guidance on circumstances under which an LLC can qualify for recognition under §501(c)(3). [Now provided in Notice 2021-56.]
- Final regulations on §509(a)(3) supporting organizations. Proposed regulations were published on February 19, 2016.
- Regulations under §512 regarding the allocation of expenses in computing unrelated business taxable income and addressing how changes made to §172 net operating losses by section 2303(b) of the CARES Act apply for purposes of §512(a)(6).
- Guidance under §4941 regarding a private foundation's investment in a partnership in which disqualified persons are also partners.
- Regulations regarding the excise taxes on donor advised funds and fund management.
- Regulations under §6104(c). Proposed regulations were published on March 15, 2011.
- Regulations designating an appropriate high-level Treasury official under §7611. Proposed regulations were published on August 5, 2009.
Exempt organizations items in other sections include guidance under section 501(c)(9) relating to welfare benefit funds, final regulations relating to the fractions rule under section 514(c)(9)(E), and partnership loss regulations relating to charitable contributions under section 704(d).
Similarly, most if not all of the priorities listed in the Program Letter (page 2) appear to repeat previously announced priorities or are obvious needs (e.g., the "Develop Our Workforce" priorities). Perhaps the most significant development mentioned is the hiring of a Chief Taxpayer Experience Officer and the opening of a Taxpayer Experience Office, but that is an agency-wide development and so probably will have limited (if any) impact on TE/GE operations.