Joint Ventures Involving Tax-Exempt Organizations, 4th Edition

CHAPTER 17International Joint Ventures

1. § 17.5 General Grantmaking Rules
2. § 17.11 Application of Foreign Tax Treaties

§ 17.5 GENERAL GRANTMAKING RULES

p. 1262. Insert the following new subsection (c) following subsection (b):

(c) Final Foreign Grantmaking Regulations

In September 2015, Treasury published final regulations for private foundations that participate in foreign grantmaking, which continue to permit a private foundation to make a good-faith determination that a prospective foreign grantee is the equivalent of a qualifying charitable organization. The final regulations redefine the IRS-favored approach to making such a determination.

The regulations state that a determination based solely on a “grantee” affidavit is no longer ordinarily considered a good-faith determination. Under the final regulations, a determination will be considered a good-faith determination only if it is based on an opinion from a qualified tax practitioner. Qualified tax practitioners include attorneys, certified public accountants, and enrolled agents, who are subject to the requirements of Circular 230. The change has been made to ensure that equivalency determinations will be based on opinions of persons likely to have a sufficient understanding of the U.S. tax law on charities.

CAVEAT

The opinion must be in the form of written advice that is “current,” which means that, as of the date of the grant payment, the relevant law upon which the advice is based has not changed and the factual ...