Look Away! The Skinny on Private Foundations

A private foundation is an IRC Section 501(c)(3) organization operated for religious, charitable, scientific, and other purposes outlined in the tax code. Private foundations differ from public charities in that a public charity’s funding comes from the public or the federal government. Private foundations, on the other hand, receive funding from limited sources like a person, family, or corporation. This practice note is a vital tool for practitioners to analyze a private foundation’s IRC Section 501(c)(3) status, organizing documents, its purpose clause, and to reference pertinent IRS forms including Forms 1023 and 990-PF annual return.

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Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.  

• Tax Key Legal Developments Tracker (Federal)
  Stay informed on new developments:

• Business Entities. The IRS and Treasury released final regulations on September 27, 2021 establishing a user fee of $67 for persons requesting the issuance of an estate tax closing letter (formerly known as IRS Letter 627). The final regulations adopt without significant change proposed regulations issued in late December 2020. 85 Fed. Reg. 86,871 (Dec. 31. 2020). The IRS and Treasury justify charging estates the fee because issuing the letters qualifies as a service providing a special benefit to estates. The IRS said it would begin charging the fee on October 28, 2021. 86 Fed. Reg. 53,539 (Sept. 28, 2021).

• IRS issues guidance regarding COBRA election and payment deadlines during the coronavirus pandemic, building on relief provided under EBSA Disaster Relief Notices 2020-01 and 2021-01, and providing transition relief, to November 1, 2021, before certain premium payment deadlines expire.I.R.S. Notice 2021-58.

• Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts.

• New and Recently Updated Practical Guidance Content
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  • Budget Bill May Wipe Out Endowment Tax for Colleges
  • House Proposed Changes – What Should Wealthy Individuals Consider?
  • US Foreign Tax Plans Could Reach Beyond Global Minimum
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