United States

IRS offers guidance on certain distribution from donor advised funds

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Long anticipated, the Treasury Department and the IRS are finally considering developing proposed regulations under section 4967 of the Internal Revenue Code that would, if finalized, provide that:

  1. Certain distributions from a donor advised fund (DAF) that pay for the purchase of tickets that enable a donor, donor advisor, or related person under section 4958(f)(7), to attend or participate in a charity-sponsored event result is a more than incidental benefit to such person under section 4967; and

  2. Certain distributions from a DAF that the distributee charity treats as fulfilling a pledge made by a donor, donor advisor, or related person, does not result in a more than incidental benefit under section 4967 if certain requirements are met.

In addition, in another long anticipated move, the Treasury Department and the IRS are considering developing proposed regulations that would change the public support computation for organizations described in sections 170(b)(1)(A)(vi) and 509(a)(1) and in section 509(a)(2) to prevent the use of DAFs to circumvent the excise tax rules applicable to private foundations under Chapter 42 of the Internal Revenue Code through a revision of the current public support tests.

In our white paper, The IRS provides guidance related to certain distributions from donor advised funds, we explore IRS positions it intends to include in its proposed regulations as well as its responses to public comments which have been received via prior requests to the general public.

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Bob Billig
Partner
National Practice Leader
866.239.8790

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