Exempt Organizations Advisory - Chile Earthquake Designated a Qualified Disaster

Catherine W. Wilkinson (cwilkinson@steptoe.com)
Suzanne Ross McDowell (smcdowell@steptoe.com) 

In Notice 2010-26 the IRS designated the Chile earthquake as a qualified disaster under section 139 of the Internal Revenue Code. This designation allows employer-sponsored private foundations to assist employees and their families who were victims of the earthquake, without threatening the foundation’s tax-exempt status. The IRS presumes that qualified disaster relief payments made by private foundations are consistent with the foundation’s charitable purpose. In addition, the designation enables recipients of qualified disaster relief payments to exclude the amount from gross income.