IRS Issues Temporary Regulations On Intermediate Sanctions

After a two-year wait, the IRS issued revised Treasury Regulations on Intermediate Sanctions. The form of the released Treasury Regulations surprised exempt organization practitioners. The IRS had issued Proposed Regulations in July, 1998, and held hearings on March 16 and 17, 1999. Final Regulations have been anticipated for some time. Instead of issuing Final Regulations, the IRS issued Temporary Regulations. Temporary Regulations have the same force and effect as Final Regulations for up to three years. The IRS will be required to issue Final Regulations before the end of the three year period when the Temporary Regulations will expire. IRS officials explained that the decision to issue the Regulations in temporary and reproposed form, instead of final form, was a result of the numerous changes contained in the Temporary Regulations. Temporary Regulations are preferable to Proposed Regulations because they do have full force and effect during the three year period prior to the