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Updated guidance for grantors, contributors to tax-exempt organizations

Updated guidance for grantors, contributors

The IRS today released an advance version of Rev. Proc. 2018-32 that updates and combines earlier IRS guidance about deductibility and reliance issues for grantors and contributors to tax-exempt organizations.

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Rev. Proc. 2018-32 [PDF 98 KB] (33 pages) modifies, supersedes, and combines earlier revenue procedures—Rev. Proc. 81-6, Rev. Proc. 81-7, Rev. Proc. 89-23, and Rev. Proc. 2011-33—into one revenue procedure with a goal of providing “…more easily accessible guidance to grantors and contributors to tax-exempt organizations on deductibility and reliance issues.”

Rev. Proc. 2018-32:

  • Sets forth the extent to which grantors and contributors may rely on the listing of an organization in IRS databases of organizations eligible to receive tax-deductible contributions under section 170, for purposes of determining whether the grants or contributions to such organizations may be deductible and for certain other purposes
  • Provides safe harbors for determining that a grantor’s or contributor’s grant or contribution will not cause the grantor or contributor to be considered to be responsible for, or aware of, an act that results in an organization’s loss of public charity classification and for determining that a grant or contribution is considered an unusual grant 
  • Incorporates modifications made in the transition from the use of Publication 78 to the use of IRS’s database, Tax Exempt Organization Search (Pub. 78 data)
  • Reflects changes to regulations eliminating the advance ruling process and changing the computation period for determining public support for organizations classified under sections 170(b)(1)(A)(vi) and 509(a)(1) or under section 509(a)(2)
  • Provides non-substantive modifications and changes for clarity and readability purposes

The purpose of this report is to provide text of the 33-page revenue procedure.

 

For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Alexandra Mitchell | +1 202 533 6078 | aomitchell@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com 

Randall Thomas | +1 202 533 3786 | randallthomas@kpmg.com

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