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Momentum Growing for IRS to Delay Implementation of New UBIT Rules; Action Needed

Posted By Madeleine McGee, Monday, June 25, 2018

Last week, the National Council of Nonprofits sent a comprehensive and compelling letter to the U.S. Department of Treasury and the Internal Revenue Service requesting delay of the implementation of two new taxes on nonprofits from the Tax Cuts and Jobs Act. 

The letter identifies dozens of challenges and questions that nonprofits have with the new federal tax law and demands that the IRS delay implementation of the new unrelated business income tax provisions in Section 512(a)(6) and 512(a)(7) of the Internal Revenue Code until one year after the IRS promulgates final regulations on these new laws. 

Section 512(a)(7) imposes a new, counter-intuitive tax on nonprofits' transportation and parking expenses. Section 512(a)(6) requires nonprofits with business income to pay the tax on each separate "trade or business" and prohibits the blending of profits and losses across lines of business. 

Both changes took effect on January 1, 2018 and both are causing significant confusion for many nonprofits because their applicability is unclear without further guidance from the IRS. 

TAKE ACTION: 
Add your voice to the call for relief!

Go to the IRS public comment form and ask  that Treasury and the IRS delay implementing the two new UBIT subsections until one year after Final Rules are promulgated(In the public comment form’s line for Form/Instruction/Publication Number,fill in "Form 990-T".)

Thanks for taking action!

Tags:  Advocacy  IRS  UBIT 

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IRS Withdraws Proposed Regulations on Gift Substantiation!

Posted By Benjamin Bullock, Together SC, Thursday, January 7, 2016

Today, the IRS announced that it had withdrawn its proposed regulations on gift substantiation which would have encouraged nonprofits to collect, store, and report donors' Social Security Numbers, placing a tremendous liability and burden on the nonprofit sector.

The IRS received 37,977 comments during the comment period, with the overwhelming majority fervently against the proposed rules. Many networks, from the United Way, Independent Sector, and the National Council of Nonprofits, rallied their members and stakeholders in opposition to the rulemaking.

The IRS issued the following statement:

“The Treasury Department and the IRS received a substantial number of public comments in response to the notice of proposed rulemaking. Many of these public comments questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers for purposes of the specific-use information return. In response to those comments, the Treasury Department and the IRS have decided against implementing the statutory exception to the CWA requirement, and therefore that exception remains unavailable unless and until final regulations are issued prescribing the method for donee reporting. Accordingly, the notice of proposed rulemaking is being withdrawn.”

Even if the IRS had not withdrawn their proposed rules, Pennsylvania Rep. Keith Rothfus introduced the "Charitable Giving Privacy Protection Act", which would prevent the IRS from making such a rule.

Thank you to all of our members who submitted comments and helped exercise our Collective Voice to stop these misguided rules from going into effect.


Tags:  Advocacy  IRS  Regulations 

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IRS receives 37,000+ Comments on Donor SSN Collection Rule

Posted By Benjamin Bullock, Together SC, Tuesday, December 22, 2015

From the National Council of Nonprofits

 

More than 37,000 concerned individuals and organizations submitted comments on the proposed gift substantiation regulation, and virtually all that are viewable expressed a common theme: it is a very bad idea for nonprofits to be asking for donors’ Social Security numbers, maintaining that personal information in their files, and submitting it to the IRS. In the view of many, “never is the better answer” when the question is whether individuals should give their Social Security numbers to people claiming to be soliciting on behalf of a charity.

 

Read more here! (second article)

Tags:  Advocacy  IRS  Regulations 

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SCANPO opposes proposed IRS rule requiring NPOs to collect donor SSNs!

Posted By Benjamin Bullock, Together SC, Monday, December 14, 2015

There’s still time to submit your comments! Comments close Wednesday Dec. 16!

Ready here why the IRS’s proposal to require nonprofits to collect donor SSNs is a bad idea!

Here’s what we sent to the IRS:

The South Carolina Association of Nonprofit Organizations opposes this proposed rule. The requirements would place an additional burden on charitable organizations and would expose them to additional liability.

Our donors trust us with their resources, believing in our missions and that we will use those resources to fulfill those missions. If we had to collect personal private information such as their social security numbers, the burden to protect that information would be overwhelming.

This rule would open the door for scam artists to solicit social security numbers and other private information from our donors, all under the protection of this rule. Furthermore, most organizations use cloud-based databases, and while they are often very secure, no encryption is perfect.

Charitable organizations would become targets of determined hackers, knowing that we will have social security numbers. Small organizations would be forced by this rule to spend money that should go to furthering their missions on higher security databases more appropriate for large healthcare systems.

Our donors are already very cautious with their personal information. This rule would be one more obstacle for donors, and there are already so many. Charitable giving will suffer under this rule, and with it, the good work the charitable sector does.

The existing rules are more than sufficient to substantiate donor contributions to validate tax deductions. Please do not add more rules which would force charities into an awkward and legally perilous position, and put at risk the sacred trust between donors and the charities they support.

Tags:  Advocacy  Comments  IRS  Regulations 

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