Risks In Making Grants To Orgs Awaiting Tax Exemption

Law360, New York (September 30, 2014, 10:20 AM EDT) -- Private foundations sometimes make grants to charitable organizations that have applied for, but not yet received, recognition as tax-exempt, charitable (i.e., Section 501(c)(3)) organizations by the Internal Revenue Service. With long wait times for determinations of exemption, this practice is increasingly common. A recent IRS private letter ruling serves as a strong reminder that the failure to exercise expenditure responsibility with respect to any grant made during that time period may result in penalty taxes on the grantor foundation.

In IRS Private Letter Ruling 201351027 (the "PLR"), a private operating foundation made a grant to an organization in which the foundation...

Stay ahead of the curve

In the legal profession, information is the key to success. You have to know what’s happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition.


  • Access to case data within articles (numbers, filings, courts, nature of suit, and more.)
  • Access to attached documents such as briefs, petitions, complaints, decisions, motions, etc.
  • Create custom alerts for specific article and case topics and so much more!

TRY LAW360 FREE FOR SEVEN DAYS

Related Sections

Law Firms

Government Agencies

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!