Overview
Today, the IRS released Revenue Procedure 2018-32, which sets forth the extent to which grantors and contributors may rely on the listing of an organization in IRS databases of organizations as eligible to receive tax-deductible contributions under section 170 for purposes of deductibility under section 170. The revenue procedure modifies and supersedes Rev. Procs. 81-6, 81-7, 89-23, and 2011-33, and combines them into one revenue procedure on deductibility and reliance issues for grantors and contributors.
The revenue procedure provides a safe harbor for determining that grantors and contributors will not be considered responsible for, or aware of, an act that results in the loss of classification due to a change in financial support if the aggregate of grants or contributions received from such grantor or contributor for the taxable year is 25% or less of the aggregate support received by the recipient organization for the preceding four years. The revenue procedure also sets forth a safe harbor for determining whether a grant or contribution from a person who was not previously a disqualified person will be considered an unusual grant. Finally, this revenue procedure incorporates the modifications made in the transition from the use of Publication 78 to the IRS’s database, Tax Exempt Organization Search, and reflects the changes to regulations eliminating the advance ruling process and changing the computation period for determining public support for organizations classified under section 170(b)(1)(A)(vi) or under section 509(a)(2).