The Report of Treasury Inspector General for Tax Administration Focuses on Payroll Filings by Exempt Organizations
According to a recent report by the Treasury Inspector General for Tax Administration (TIGTA), there is a small percentage of exempt organizations that owes the majority of Federal tax debt. TIGTA found that more than 64,200 exempt organizations, or 3.8 percent, had nearly $875 million in delinquent payroll taxes as of June 2012. Twenty-five of the worst delinquents received government payments over a three-year period of $148 million, consisting of Medicare, Medicaid, and government grants.
Exempt organizations generally do not have to pay income taxes, however, they are subject to payroll taxes. TIGTA recommends that the IRS EO division work with the Department of Treasury to better monitor compliance on payroll taxes.
Click here to read the full report from TIGTA [PDF]
Grant-Making Program Scholarship Awards Constitutes Qualified Distribution
The IRS recently issued two letter rulings (LTR) approving private foundations' grant-making scholarship program awards as qualified distributions. When a private foundation pays a grant to an individual in the form of providing scholarships to students majoring in a particular program at a school, or to students of schools located in a particular area, the grants are not considered as taxable expenditures to the foundation and are not taxable income to the recipients.
Click here to read LTR 201432023 [PDF]
Click here to read LTR 201432024 [PDF]
Taxpayers Are to Be Aware When Taking Charitable Deductions for Façade Easements
The Tax Court has issued an opinion in
Chandler v. Commissioner, 142 T.C. No. 16 (2014), regarding charitable deductions for façade easements. The Court ruled against the taxpayers in this case. Taxpayers should be aware when claiming charitable deductions for façade easements when the properties owned are located at a historic district in which properties are already subject to local property restrictions. The Court has seen the creation of façade easements for such properties as duplicative and has no effect on the value of the properties, and therefore, no charitable deduction is allowed.
Click here to read Chandler v. Commissioner, 142 T.C. No. 16. [PDF]
