Three new technical guides published

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Three new technical guides published                        

Exempt Organizations and Government Entities has published three new Technical Guides (TGs). These guides are comprehensive, issue-specific documents that update and combine the Audit Technique Guides (ATGs) with other technical content. Once completed, the TGs replace corresponding ATGs.

The new TGs are:

• TG 3-8: Disqualifying and Non-Exempt Activities, Inurement and Private Benefit - IRC Section 501(c)
• TG 3-27: IRC Section 501(c)(3) Foundation Classification - Other Public Charities - IRC Sections 509(a)(1) and 170(b)(1)(A)(iv), (v), (ix) and Section 509(a)(4)

TG 70: Charitable Trusts

TG 3-8 addresses the concepts of inurement and private benefit pertaining to Section 501(c)(3) organizations. Organizations exempt under Section 501(c)(3) of the Internal Revenue Code (Code) must avoid engaging in impermissible conduct, including that which results in private benefit and inurement. An otherwise qualifying organization will be disqualified for exemption if it benefits private interests, either through inurement of its net earnings to certain “insiders,” or by primarily benefiting the interests of persons who, though not “insiders,” do not comprise a charitable class.

TG 3-27 addresses the following public charity foundation classifications:

• Under Section 509(a)(1) of the Code: Section 170(b)(1)(A)(iv) – Organizations for the Benefit of Certain State and Municipal Colleges and Universities; Section 170(b)(1)(A)(v) – Governmental Units; and Section 170(b)(1)(A)(ix) – Agricultural Research Organizations.
• Under Section 509(a)(4) of the Code: Organizations Testing for Public Safety

TG 70 addresses technical information and examination techniques regarding non-exempt charitable trusts (NECTs) and split-interest trusts. These trusts are subject to certain excise taxes under Chapters 41 and 42 pursuant to Section 4947. To provide context for the discussion of NECTs and split-interest trusts, this TG also provides an overview of trusts in general, Section 4947, and the common characteristics and different varieties of NECTs and split-interest trusts. It also discusses issues that may arise for trusts described in Sections 4947(a)(1) and (a)(2).

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