IRS Proposes Broader Practitioner Group to Determine Foreign Charity

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IRS proposes rules (REG-134974-12) that would identify a broader class of tax practitioners for private foundations to rely on for written advice upon which to base a good faith determination that a foreign organization is a charitable organization. At issue is whether the grants the organizations make will be considered qualifying distributions and not taxable expenditures. The current rules under tax code Sections 4942 and 4945 say a determination is ordinarily considered to be made in good faith if it is based on an affidavit of the foreign organization or an opinion of counsel of the grantor or grantee.

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