The Council has submitted comments requested by the IRS and Treasury related to Notice 2018-67 regarding how to identify separate unrelated trades or businesses for purposes of Section 512(a)(6) of the Internal Revenue Code. Following is a link to the comments submitted earlier this week: TEGE EO Council 512(a)(6) Comments.

This has been a significant effort on the part of many. Special thanks to Stephen M. Clarke and Mary Rauschenberg for leading the effort and to Alex Reid (Regulatory Affairs Chair) and the Regulatory Affairs Committee (Lori Boyce and Eve Borenstein) for their assistance.

4960 Comments. On December 31, 2018, the IRS issued Notice 2019-09, which provides interim guidance on the new 4960 excise tax applicable to certain compensation paid by tax-exempt organizations enacted as part of the Tax Cuts and Jobs Acts of 2017. Council leadership is seeking interest in participating in or leading an effort to submit comments on the interim guidance, no later than the first week of March 2019. Please email Alex Reid (alexander.reid@morganlewis.com) if you are interested in participating.

As many of you know, effective February 22, 2018, the exempt organizations side of the historic TEGE Councils reorganized into one national TEGE Exempt Organizations Council. The TEGE councils have always focused on conversations—with government and regulators and amongst the practitioner community. The consolidated TEGE Exempt Organizations Council will provide a stronger voice on a national level and better facilitate garnering the attention of and speaking to policymakers at the IRS, Chief Counsel, and Treasury. The Council has already conducted two tax reform comment projects in 2018, with a third currently under way. In addition to continuing existing programming, the consolidated Council will provide expanded opportunities for practitioners to interact and share ideas with other tax-exempt experts across the country.

Purposes. The TEGE Exempt Organizations Council was formed to (i) open and maintain lines of communication between the Tax Exempt & Government Entities Division of the IRS and the practitioner community, (ii) provide the TEGE Division with the thinking of the practitioner community on procedural and systemic matters, (iii) provide practitioners a forum to share their concerns with the IRS regarding both policies and specific tax issues and procedures, and (iv) educate the practitioner community and the exempt organizations community.

Membership. One of the exciting aspects of the consolidated TEGE Exempt Organizations Council is the simplification and expansion of membership. Members will continue to include attorneys, CPAs and accountants, and other practitioners in the exempt organizations industry. Initial members include current members of an existing TEGE regional council, and additional members will be accepted based on the following criteria:

1. Expression of an interest in the purposes of the Council and in membership; and
2. The provision of significant professional services in or to the exempt organization community (including professionals who work within an exempt organization).

Potential members should complete a basic membership application establishing their qualifications, which can be submitted online through our new website at www.eocouncil.org.

Leadership. Council leadership will continue to include representation from each of the five historical IRS exam regions. We are thrilled to announce our initial Board of Directors, Officers, and Chairs at https://www.eocouncil.org/leadership.html. The Council’s Bylaws require comparable representation for attorneys and certified public accountants. No more than one representative from any one firm may hold a director position. No more than two representatives from any one firm may hold officer positions.

Programs. TEGE Exempt Organizations Council programs will continue to be open to the public and publicized to the Council’s broad distribution and membership list. We will continue to leverage technology to broaden program accessibility. We anticipate that our current program calendar will remain consistent for 2019 and 2020.

Please save the date for our upcoming programs on December 11, 2018 (Presentation and Q&A session with Margaret Von Lienen, Director, Exempt Organizations) and our two-day annual meeting in Baltimore on February 21-22, 2019.

TEGE EO Council Members and Alumnae, Past Attendees, Tax Press, and Friends,

At the September 11 TEGE Exempt Organizations Council program, government speakers Margaret Von Lienen, Elinor Ramey, and Janine Cook asked for comments/feedback on a variety of topics. We are seeking volunteers to participate in one or more comment topics below and to actively and timely participate in providing feedback/perspective. The forms/instructions comments in particular are needed quickly in order to be relevant.

• Forms/instructions’ immediate needs related to tax reform – 990 series, 4720N, and K-1s (including Form 990-T when released);
• Unrelated Business Income Tax, including 512(a)(6) silo rules, Notice 2018-67, NOL ordering rules, investment revenue issues, and use of NAICS codes for identifying separate trade or business activities;
• Clarification as to when disclosure of related organization as a “controlled entity” under 512(b)(13) is required on Form 990 Schedule R, Parts II and IV;
• Partnership audit rules as they relate to exempt organizations; and
• Section 4968(c) (excise tax on investment income of private colleges and universities) guidance needed and transitional relief,

Please respond to Danika Mendrygal (danika@mendrygallaw.com) as soon as possible if you are interested in actively contributing to the comment process, or if you have existing written comments to submit.

We are also seeking redacted sample portions of partnership agreements that address the partnership audit rules with respect to exempt organization participation and the allocation of any liability for tax at the partnership or partner level. Please forward these to Danika (danika@mendrygallaw.com) as well.

On August 16, 2018, the EO Council submitted comments regarding the need for guidance with respect to certain provisions in Public Law No. 115-97 (the “Tax Cuts and Jobs Act”) affecting tax-exempt organizations and their donors. Following is a list of the submissions:

• Cover letter
• Comments
• PowerPoint slides, referenced in the Comments