Exempt Organizations Advisory -04/28/04

Originally published April 28, 2004

The Exempt Organizations Advisory summarizes legal developments of interest to our exempt organization clients and friends of the firm. It is published on a periodic basis as developments warrant.

By: Suzanne Ross McDowell ([email protected])

Last week, the IRS and Treasury issued Notices 2004-35 and 2004-36, announcing that new regulations will be promulgated under sections 4940 (relating to tax on investment income) and 4942 (relating to mandatory distributions) in light of the decision in Ann Jackson Family Foundation v. Commissioner, 97 T.C. 534 (1991), aff’d, 15 F.3d 917 (9th Cir. 1994). That case held that regulations under section 4942, which required private foundations to treat distributions from split interest-trusts as if they were income of the private foundation, and thus redistribute the