Tuesday, March 9, 2021
The Urban Institute will host a meeting of key stakeholders to discuss Data and Technology: Resources and Implications for Nonprofit Regulation and Oversight on March 25th and 26th. Persons interested in participating should contact Elizabeth Boris (firstname.lastname@example.org) or Cindy Lott (email@example.com). Here is the description of the event:
The Urban Institute's Regulation of Nonprofits and Philanthropy Project will convene key stakeholders to consider how current research and data platforms could inform regulation and oversight of US nonprofits. The event will focus on data and technologies charities regulators require to succeed in their oversight roles. We invite you to join us, researchers, leaders from data-providing organizations, and state and federal charities regulators to explore how to promote data-informed nonprofit regulation.
This year may well prove to be one of exciting developments for historically black colleges in Maryland: a pair of bills currently undergoing the legislative process in the state stand to bring nearly six hundred million dollars to Morgan State University, Coppin State University, Bowie State University and the University of Maryland Eastern Shore (all of which are public universities). These funds are being pursued as settlement in a lawsuit dating back to 2006: this action alleges decades of discriminatory funding allocation by the state’s funding entities in favor of Maryland’s predominantly white educational institutions. Despite more than a decade of litigation and a veto by the state’s governor last year in the midst of the pandemic, it appears that supporters for the bill’s passage have amassed sufficiently overwhelming bipartisan support to assure the bill’s passage. Quite possibly the problems identified by this lawsuit are not unique to Maryland’s educational structure: perhaps the next decade will see similar actions in other states across the country.
For more information on the lawsuit and the legislative battle for the passage of this bill, see the attached Baltimore Sun article by Bryn Stole: https://www.baltimoresun.com/politics/bs-md-pol-hbcu-lawsuit-20210119-hkwjten5pzdybcem7pj5r5ppji-story.html
For information regarding Michael Jones, one of the Maryland lawyers spearheading the lawsuit on behalf of the plaintiffs, see yesterday’s Law360 article by Sameer Rao: https://www.law360.com/articles/1360192/a-kirkland-partner-s-journey-to-a-historic-hbcu-settlement
By David Brennen, Professor of Law at the University of Kentucky
Sunday, March 7, 2021
Louis Eguzo (Ph.D. candidate at the University of Maryland) has posted Governance and Accountability: A Systematic Review to Examine Its Impact on Social Mission in Nonprofit Organizations. Here is the abstract:
This qualitative review examines the impact of governance and accountability on social missions in nonprofit organizations (NPOs). The purpose of this research is to conduct a systematic review of the literature to identify the impact of governance and accountability on social missions. The research explored 25 extant works of literature leveraging stakeholder theory to identify the impact of governance and accountability. The author suggests that this research may contribute to the body of knowledge related to governance, accountability, and conflict of interest in NPOs. The implication of this review will inform recommendations for NPOs on how to measure outcomes, be accountable, and practice governance that is devoid of crisis. The articles are relatively recent and appeared between 2000-2020.
Nancy McLaughlin (University of Utah) has posted Conservation Easements and the Proceeds Regulation (forthcoming Real Property Trusts & Estate Law Journal). Here is the abstract:
This article provides an in-depth look at Treasury Regulation § 1.170A-14(g)(6)(ii), known as the proceeds regulation. The proceeds regulation is intended to protect the public investment in conservation if a perpetual conservation easement that was the subject of a charitable deduction under Internal Revenue Code § 170(h) is later extinguished. A proper understanding of the proceeds regulation is critical because the public investment in deductible easements is significant—billions of dollars are being invested in such easements annually—and the regulation has recently been subject to challenges regarding its interpretation and validity. This article examines the history and operation of the proceeds regulation as well as possible alternatives. It explains that the proceeds regulation provides a simple and easy-to-implement rule that avoids a host of future valuation difficulties. It demonstrates that the proceeds regulation is neither irrational nor inherently unfair to donors or subsequent property owners, and serves to temper the perverse incentive that property owners may have to seek to extinguish easements. This article concludes that the proceeds regulation provides a reasonable solution to the difficult problem of ensuring that the conservation purpose of a contribution will be protected in perpetuity as required by § 170(h)(5)(A).
Mary Scott Polk (J.D. candidate at the University of Mississippi) has posted What to Do With Leftovers: Collecting Earmarked Donations Through Mobile Payment Apps. Here is the abstract:
With the rise in mobile payment applications, charitable donations using these platforms are increasing; equally, the use of a conduit between a donor and a charity to solicit and collect donations for the charity's benefit is growing. If a charity is overfunded or the charitable purpose is no longer available, the conduit is caught holding a pool of designated donations without the ability to contact the donors for permission for a similar or alternate use. Using the Internal Revenue Code requirements, the authority and regulations are not apparent for a charitable contribution through a conduit, particularly not for a conduit’s use of a mobile payment application. Part I of this Comment provides an overview of the conduit situation and the complications that arise. Part II introduces the requirements of a charitable contribution and the services that mobile payment applications offer. Part III analyzes three donation methods: a contribution directly to a 501(c)(3) organization, a contribution to an individual, and a contribution to a 501(c)(3) organization through an individual. Part IV examines the potential solutions to the issue of overfunded charities and the motivations behind each. Finally, Part V offers a brief overview of the prevalence of the issue and the future of mobile payment applications. The interaction of the detailed requirements of the Internal Revenue Code for a charitable contribution and mobile payment applications’ privacy policies, without clear authority or direction on the specific conduit situation, has the potential to be problematic and challenging for the contributor, conduit, charitable organizations, and mobile payment applications.
Int'l Developments: Ten Cases That Shaped Charity Law in 2020, European Legal Philanthropy Environment, Global Philanthropy, and Tax Incentives for Cross-Border Giving
- Ten Cases that Shaped Charity and Nonprofit Law in 2020 And Ten Trends to Consider by Myles McGregor-Lowndes and Frances Hannah (both Queensland University of Technology): Based on a review of over 200 cases.
- Legal Environment for Philanthropy in Europe (2020) by Philanthropy Advocacy, a joint project of the Donors and Foundations Network in Europe (DAFNE) and the European Foundation Centre (EFC).
- Global Philanthropy: Does Institutional Context Matter for Charitable Giving? (Nonprofit and Voluntary Sector Quarterly) by Pamela Wiepking (Lilly Family School of Philanthropy), Femida Handy (University of Pennsylvania), Sohyun Park (Yonsei University), and others. Here is the abstract:
In this article, we examine whether and how the institutional context matters when understanding individuals’ giving to philanthropic organizations. We posit that both the individuals’ propensity to give and the amounts given are higher in countries with a stronger institutional context for philanthropy. We examine key factors of formal and informal institutional contexts for philanthropy at both the organizational and societal levels, including regulatory and legislative frameworks, professional standards, and social practices. Our results show that while aggregate levels of giving are higher in countries with stronger institutionalization, multilevel analyses of 118,788 individuals in 19 countries show limited support for the hypothesized relationships between institutional context and philanthropy. The findings suggest the need for better comparative data to understand the complex and dynamic influences of institutional contexts on charitable giving. This, in turn, would support the development of evidence-based practices and policies in the field of global philanthropy.
- Tax Incentives for Cross-Border Giving in an Era of Philanthropic Globalization: A Comparative Perspective (Canadian Journal of Comparative and Contemporary Law) by Natalie Silver (University of Sydney) and Renate Buijze (Erasmus University Rotterdam). Here is the abstract:
The 21st century has ushered in an era of philanthropic globalization marked by a significant rise in international charitable giving. At the same time, cross-border philanthropy has raised legitimate fiscal and regulatory concerns for government. To understand how donor countries have responded to this changed global philanthropic landscape, we use comparative tax methodology to develop a spectrum of approaches to the tax treatment of cross-border giving and apply tax policy criteria to critically evaluate the divergent approaches of Australia and the Netherlands, located at opposing ends of the spectrum. Findings from the comparative analysis reveal that in the current global environment for philanthropy there is a strong case to be made for allowing tax deductible donations to cross borders.
A federal district court has ruled in favor of Fidelity's donor advised fund sponsor organization ("Fidelity Charitable") in a lawsuit brought by donors upset with how the organization handled a large stock donation. A few thoughts on the February 26th decision in Emily Fairbairn et al. v. Fidelity Investments Charitable Gift Fund:
The case shows how important the DAFs associated with commercial investment firms have become. It is disputes involving donors for these DAFs that are likely to be the primary source of litigation in this area going forward, as the attention this case garnered illustrates. The court even stated that DAFs are housed at "a 501(c)(3) nonprofit organization that has usually been created by a for-profit financial institution" (top of page 3). I am not sure the "usually" is correct, but that is clearly the court's perception, and likely the current perception of much of the public.
The case shows the importance of clear and well communicated written policies for DAF sponsors. The Fairbairns lost in part because some of their allegations contradicted Fidelity Charitable's written policies regarding how non-monetary donations would be handled that had been repeatedly shared with them. For example, the court found that the Fairbairns failed to prove by a preponderance of the evidence that Fidelity Charitable had promised to not sell any shares until January 2018, in large part because even if an oral promise along those lines had been made it was unreasonably to rely on it given the written materials provided (top of page 8). The court also found that even if Fidelity Charitable had a duty to the Fairbairns, Fidelity Charitable did not violate that duty in part because because the immediate sale of donated shares was consistent with Fidelity Charitable's published policies (bottom of page 15).
The case leaves for another day whether DAF sponsors owe a duty of care to DAF donors. The court concluded that if a duty was owed under California law it is not the same as the duty owed by an investment advisor to an investor who owns the relevant securities (page 18). But more importantly, the court decided to "not finally resolve whether Fidelity Charitable owed the Fairbairns a duty of care under California law" as doing so was not necessary for it to rule in favor of Fidelity Charitable. So it will be left to future courts, including in California, to resolve that important issue.
Thursday, March 4, 2021
The IRS has publicly released a March 1st Memorandum to Exempt Organizations Examinations Employees on "Interim Guidance on Verifying Forms 8976 Were Filed and Applicable Penalties". Section 501(c)(4) organizations that either came into existence after July 8, 2016 or while coming into existence earlier had not submitted either a Form 1024 or Form 990 series return (990, 990-EZ, or 990-N) on or before that date are required to file Form 8976 with the IRS to notify it of their existence. The requirement is codified in IRC section 506 and described in both Rev. Proc. 2016-41 and Treas. Reg. § 1.506-1.
The memo instructs those employees to do the following:
- Examiners must perform a filing check for Form 8976 during all examinations of IRC
Section 501(c)(4) organizations.
- If you determine that the organization failed to timely file a completed Form 8976,
consider the IRC Section 6652(c)(4) penalties.
Hat Tip: EO Tax Journal
Wednesday, March 3, 2021
The U.S. Government Accountability Office released a report titled IRS and Education Could Better Address Risks Associated with Some For-Profit College Conversions. Here are excerpts from the highlights:
What GAO Found
GAO identified 59 for-profit college conversions that occurred from January 2011 through August 2020, almost all of which involved the college's sale to a tax-exempt organization. In about one-third of the conversions, GAO found that former owners or other officials were insiders to the conversion—for example, by creating the tax-exempt organization that purchased the college or retaining the presidency of the college after its sale (see figure). While leadership continuity can benefit a college, insider involvement in a conversion poses a risk that insiders may improperly benefit—for example, by influencing the tax-exempt purchaser to pay more for the college than it is worth. Once a conversion has ended a college's for-profit ownership and transferred ownership to an organization the Internal Revenue Service (IRS) recognizes as tax-exempt, the college must seek Department of Education (Education) approval to participate in federal student aid programs as a nonprofit college. Since January 2011, Education has approved 35 colleges as nonprofit colleges and denied two; nine are under review and 13 closed prior to Education reaching a decision.
IRS guidance directs staff to closely scrutinize whether significant transactions with insiders reported by an applicant for tax-exempt status will exceed fair-market value and improperly benefit insiders. If an application contains insufficient information to make that assessment, guidance says that staff may need to request additional information. In two of 11 planned or final conversions involving insiders that were disclosed in an application, GAO found that IRS approved the application without certain information, such as the college's planned purchase price or an appraisal report estimating the college's value. Without such information, IRS staff could not assess whether the price was inflated to improperly benefit insiders, which would be grounds to deny the application. If IRS staff do not consistently apply guidance, they may miss indications of improper benefit.
Education has strengthened its reviews of for-profit college applications for nonprofit status, but it does not monitor newly converted colleges to assess ongoing risk of improper benefit. In two of three cases GAO reviewed in depth, college financial statements disclosed transactions with insiders that could indicate the risk of improper benefit. Education officials agreed that they could assess this risk through its audited financial statement review process and could develop procedures to do so. Until Education develops and implements such procedures for new conversions, potential improper benefit may go undetected.
* * *
What GAO Recommends
GAO is making three recommendations, including that IRS assess and improve conversion application reviews and that Education develop and implement procedures to monitor newly converted colleges. IRS said it will assess its review process and will evaluate GAO's other recommendation, as discussed in the report. Education agreed with GAO's recommendation.
The Congressional Research Service has updated its report on Temporary Enhancements to Charitable Contributions Deductions in the CARES Act to reflect extensions included in the Consolidated Appropriations Act, 2021. Here is a summary:
The CARES Act and the Consolidated Appropriations Act, 2021 provided for three enhancements to the
charitable deduction for 2020 and 2021. First, they provided a deduction for cash donations for
nonitemizers of up to $300 who take the standard deduction. Second, they eliminated the limit on cash
gifts of individuals to public charities (but not to donor advised funds, supporting organizations, or private
foundations). Third, they increased the limit on charitable contributions from corporations (including food
inventory) and individual contributions of food inventory to 25% of taxable income.
The IRS's Statistics of Income office has released the 2018 noncash charitable contributions reported by individuals on Form 8283 data, now available on its Individual Noncash Charitable Contributions webpage. The table from the Excel spreadsheet is shown below.
The Treasury Inspector General for Tax Administration recently released a new report titled Emphasis on Unrelated Business Income Tax Enforcement Should Be Enhanced. TIGTA made the following specific recommendations:
- Clarify the EO Examination function’s guidance to require examiners to address UBI and include evidence of its UBI identification efforts in every case file, including focused examinations.
- Restore UBI references to the IRM to reinforce their importance to an organization’s exempt status.
- Require, in appropriate cases, that examiners request any missing Forms 990-T and inform taxpayers of the potential risks if they do not comply with their filing requirements in accordance with Treasury Regulation § 1.6012-2(e).
- Evaluate claim thresholds sent to the field in an effort to minimize impact on limited resources and analyze specific case circumstances to prevent unnecessary case referrals to an EO Examination group.
- Include UBI tax issues in future compliance projects to identify issues preventing taxpayers from being compliant with their UBI reporting requirements.
- The Commissioner, TE/GE Division, should update the Classification and Case Assignment’s Classification Desk Guide to require experienced senior EO classifiers to review claims involving an NOL prior to accepting the claim as filed and document the review in the case file.
- Implement safeguards to ensure the accuracy of the Reporting Compliance Case Management System Closing Record to avoid material errors that affect information reports based on these inputs, which are relied upon by internal and external stakeholders.
- Replace the respective IRM sections that provide instructions on the Form 5599 with the revised Reporting Compliance Case Management System Closing Record and clarify any differences in how examiners should complete this process for appealed examinations.
The IRS agreed with the last six recommendations, but disagreed with the first two recommendations and so does not plan to follow them.
With the new year came final regulations under section 4960, interpreting the excise tax on excess remuneration paid by tax-exempt organizations to covered employees. They are effective for tax years beginning after December 31, 2021; before then, exempt organizations may rely either on Notice 2019-09 or the proposed regulations instead, but only if they do so in their entirety. Numerous commentators have now created helpful summaries of the final rules, including:
- Law Firms
- Accounting Firms
- Media Outlets
The IRS Tax-Exempt and Government Entities Division recently released its list of Fiscal Year 2020 Accomplishments. The list included the following items for Exempt Organizations:
- Examining 3,240 returns, including but not limited to the Form 990 series. But as previously reported by TIGTA using FY2019 data, this represents an audit rate of less than 0.2 percent. The examinations had a change rate of 88 percent, but only led to 36 proposed revocations.
- Compliance initiatives included hospital unrelated business income, 501(c)(7) social clubs, 4947(a)(1) non-exempt charitable trusts, 501(c)(3) charitable nonprofits that previously operated as for-profit entities, and organizations with private benefit or private inurement indicators.
- Closed 95,864 applications for recognition of exemption, including 85,509 approvals (of which 79,730 were under 501(c)(3)). More than 60,000 of the slightly over 100,000 applications received in FY2020 were Form 1023-EZs, continuing the increasing importance of that streamlined application form.
- Transition to mandatory electronic filing for both Form 1023 and Form 990.
It should be acknowledged that much of this work was done even as IRS employees had to pivot to remote work because of the pandemic.
Thursday, February 25, 2021
Exciting times in the world of nonprofit law, as the Supreme Court will soon decide a case with potentially significant implications for regulation of nonprofits. Nonprofits challenge the constitutionality of a California law that requires the organizations to provide their unredacted Form 990 – including Schedule B’s list of major donors – to the State as a condition of soliciting donations in the state.
The petitioners/plaintiffs – conservative organizations Thomas More Law Society and Americans for Prosperity Foundation -- cite the risk of the information being publicly disclosed by the state and the fear their donors possess of being harassed if their support for these organizations is made public. The plaintiffs rely heavily on the NAACP v. Alabama case from the 1950s, where the Supreme Court struck down an Alabama ruling that required the NAACP to publicly disclose its members, finding that such a disclosure would pose significant challenges to the ability to associate to advocate against oppression. Petitioners do argue that their donors may be less willing to donate and may face reprisal if their identities are known, but they do not and cannot argue that they face the same levels of risk that members of the NAACP faced in the 1950s South. The analogy is further strained by the fact that California has promised not to publicly disclose the identity of major donors, which further reduces the risk to associational rights.
The government, in contrast, cites to Citizens United and Doe v. Reed, which blessed laws requiring disclosure of donors in election-related contexts as a way of supplying the electorate information on which to judge the messages we’re hearing. Yet California’s law isn’t triggered by election-related speech as in Doe and Citizens United. Instead, it is triggered by charitable solicitation for any cause, and applies broadly to organizations across the nonprofit spectrum.
Relying on precedent, the 9th Circuit rejected out of hand the plaintiffs’ facial challenge to California’s law. And finding that the plaintiffs failed to prove their case (rejecting the district court’s factual findings to the contrary), the 9th Circuit also rejected the plaintiffs’ as-applied challenge to the disclosure requirement. The Second Circuit had reached a similar conclusion in a challenge to an analogous provision in New York’s law, and there wasn’t a split on this narrow point. Yet the Supreme Court agreed to take the case, which will be argued towards the end of this term. There are a lot of vulnerabilities in the case for California (such as unfavorable factual findings by the district court, a sloppy regulatory canvas (for example, not enshrining the rule against public disclosure in statute)), but a loss for California could have ramifications well beyond California and well beyond the specific mandate challenged here.
While the entire case is complex, here are some of the questions that the Court might find it necessary to address:
- What is the standard of review: Is it strict scrutiny, intermediate scrutiny, “exacting” scrutiny, or something else entirely?
- Is the case best decided as a facial or as-applied challenge? Does it matter?
- Is a constitutional analysis only required upon a threshold associational showing of a risk of threats/violence/harassment/something else, or does it apply even in the absence of this predicate showing?
- Assuming that the mode of analysis is, or is similar in structure to, strict/exacting/intermediate scrutiny, what are valid government interests that would justify the compelled disclosure, and what level of proof is needed? Conversely, what are the relevant associational interests at stake, and what level of proof is needed?
- Does the rule change depending on the content area of the association’s speech (political v. ballot initiative v. lobbying v. other)? The parties seem keen to use content of speech (election-related versus something else) as a dividing line.
- What effect, if any, does the fact that these organizations already provide this information to the IRS have on their challenge? (For example, does the constitutional analysis change depending on whether the compelled disclosure is in the context of granting tax exemption (the IRS requirement) versus engaging in charitable solicitation (California rule)?
Joseph W Mead
Last week, the Treasury Inspector General issued a report, Obstacles Exist in Detecting Noncompliance of Tax-Exempt Organizations. From the summary:
Information reported on tax-exempt organizations’ returns does not always indicate noncompliance; therefore, the IRS relies heavily on referrals to identify abusive schemes. However, TIGTA found that although referrals may help detect tax schemes, they do not always lead to productive cases. In addition, the chances of examination for tax-exempt organizations is lower when compared to examination rates of businesses and individuals. For Fiscal Year (FY) 2019, the chance of examination for exempt organizations was one in 742, compared to one in 156 for businesses and one in 226 for individual taxpayers. Further, churches and certain other religious organizations are not required to file annual information returns making it difficult to track the activities of these organizations to identify noncompliance. For FY 2019, the chance of examination for churches was about one in 5,000.
Sunday, February 21, 2021
From the inbox:
The Committee on Nonprofit Organizations of the American Bar Association’s Business Law Section is calling for nominations for the “2021 Outstanding Nonprofit Lawyer Awards.” The Committee presents the Awards annually to outstanding lawyers in the categories of Academic, Attorney, Nonprofit In-House Counsel, and Young Attorney (under 35 years old or in practice for less than 10 years). The Committee will also bestow its Vanguard Award for lifetime commitment or achievement on a leading legal practitioner in the nonprofit field.
Nominations are due by March 22, 2021. For a nomination form, please go to the Nonprofit Organizations Committee webpage and scroll down to find the form under “2021 Outstanding Nonprofit Lawyer Awards." The Awards will be announced at the Business Law Section's Spring Meeting in April.
Friday, February 5, 2021
U.S. Senators and Representatives reintroduced the Spotlight Act again to repeal the regulations issued by Treasury and the IRS in 2020 that eliminated the requirement for many tax exempt organizations to have to disclose substantial donor names and addresses.
"U.S. Senators Jon Tester (D-Mont.) and Ron Wyden (D-Ore.) along with U.S. Rep. David Price (D-N.C.) today are reintroducing their Spotlight Act to shine a light on dark money political donors and hold the government accountable to enforce our nation's campaign finance laws. This legislation is also supported by Senators Bennet, Carper, Whitehouse, Blumenthal, Murray, Van Hollen, Merkley, Klobuchar, Hirono, King, Brown, Cortez Masto, Booker, Menendez, Casey, Warren and Baldwin.
The Spotlight Act would require certain political non-profit organizations to disclose their donors to the Internal Revenue Service (IRS), reversing a Trump-era rule that eliminated the requirement and allowed such organizations to keep their donors secret."
You can find the Act here.
Wednesday, February 3, 2021
Fascinating collision of art and activism with an art museum's brand attached to the chairman of its board of trustees. The Activist artist group the Guerrilla Girls have posted a prominent ad outside the Modern Museum of Art calling for it to end its relationship with Leon Black as a board member because of his strong connection to Jeffrey Epsten.
"The Museum of Modern Art (MoMA) in New York is facing increasing pressure to part ways with the chairman of its board of trustees, Leon Black, following revelations about the billionaire’s close ties with convicted sex offender Jeffery Epstein. The activist group Guerrilla Girls, which has been voicing this demand since 2019, revealed that it had canceled a book contract with Phaidon Press that same year after realizing the art publisher is owned by Black.
Guerrilla Girls claim that they contracted with Phaidon Press in 2018 to publish a book that surveys their activism since 1985. In a report by the New York Times, the group first revealed that it broke the contract a year later after news surfaced about Black’s relationship with Epstein. Instead, the group published Guerrilla Girls: The Art of Behaving Badly with Chronicle Books in 2020."
Tuesday, February 2, 2021
The Office of the Chief Counsel of the IRS recently issued a memorandum describing when nonprofits seeking charitable tax exempt status under section 501(c)(3) might receive relief from failing to file their application in a timely manner. For counsel meeting this problem, this memo is likely a very useful tool for considering options.
It's a long memo, but the basics are:
1. Under what circumstances, if any, should Exempt Organizations, Determinations (EOD) provide Treas. Reg. § 301.9100-3 relief to IRC section 501(c)(3) applicants?
2. What is the proper process for denying relief requests under § 301.9100-3? (i.e., does taxpayer have section 7428 Declaratory judgment rights?)
- Section 501(c)(3) organizations who are eligible to self-declare, like non-(c)(3) self-declarers, are not eligible for § 301.9100-3 relief because they did not fail to make a required regulatory election. Further, organizations that fail to file the necessary information returns holding themselves out as exempt organizations are not eligible for § 301.9100-3 relief because they would not otherwise be exempt for the period for which they are requesting relief. In addition, the Internal Revenue Service (“Service”) is justified under the applicable standard of review to deny such relief on the grounds that the organizations did not act in reasonable good faith. Finally, organizations that have filed the necessary information returns are not eligible for relief beyond the date of which the statute of limitations on assessment of tax has expired, which is typically three years after the due date of the return.
- Denial of § 301.9100-3 relief by EOD does not separately provide a right to petition the Tax Court under section 7428 because § 301.9100-3 relief is purely a function of administrative grace, is not a justiciable controversy described in section 7428, and is reviewed under a completely separate standard than the de novo standard used in section 7428 actions. However, section 7428 jurisdiction over the denial of exempt status for periods prior to the postmark date of the
application appears to be a matter of first impression."