Taxes on Taxable Distributions from Donor Advised Funds under Section 4966

The Rose Community Foundation, a nonprofit organization serving the Denver/Boulder metropolitan area, is requesting the opportunity to provide testimony at a public hearing. Their testimony will focus on the impact of the proposed regulations on pooled and fiscally sponsored funds, philanthropy, and the nonprofit sector.

The Greater Toledo Community Foundation is requesting the opportunity to provide in-person testimony at a public hearing regarding proposed regulations on taxes for Donor Advised Funds. The organization intends to discuss the reclassification of funds, the definition of a "distribution," and the effective date of the regulations.

The North Texas Community Foundation is requesting to testify against the proposed regulations, arguing that taxing the fees and expenses of Donor Advised Fund (DAF) distributions would reduce the funds available for local charities. They highlight that investment advisors are not "warehousing" funds and that taxing professional fees (such as legal costs to defend donor intent) would negatively impact community support.

The Madison Community Foundation is requesting to testify against the proposed regulations regarding taxes on taxable distributions from Donor Advised Funds. They argue that the regulations will place a disparate burden and administrative weight on small and medium-sized community foundations, particularly concerning "advisory privileges" and compliance requirements.

Schell Bray, PLLC, a law firm representing philanthropic organizations, opposes several provisions of the proposed regulations as being overly broad, inconsistent with existing law, and potentially chilling First Amendment rights. They specifically argue against the retroactive application of the rules, the expanded definition of "donor-advisor," and the restrictive treatment of program-related investments.

Schell Bray, PLLC, a law firm representing philanthropic organizations, opposes several provisions of the proposed regulations as being overly broad, inconsistent with existing law, and potentially chilling First Amendment rights. They specifically argue against the retroactive application of the rules, the expanded definition of "donor-advisor," and the restrictive treatment of program-related investments.

The Tidewater Jewish Foundation, a publicly supported charity, opposes the proposed regulations because they are overly broad, inconsistent with Congressional intent, and would have significant unintended consequences for charitable giving. Specifically, the foundation argues that the regulations incorrectly classify certain investment fees as taxable distributions and improperly expand the definition of donor-advised funds.

A coalition of charitable and nonprofit organizations, including the American Association of Christian Schools and the Philanthropy Roundtable, expresses concern that the proposed regulations could create unintended disincentives for donors. They argue that the regulations might lead to a decrease in the use of Donor-Advised Funds (DAFs), ultimately resulting in less charitable giving for the communities they serve.

The TEGE Exempt Organizations Council, representing a community of tax practitioners, argues that the Proposed Regulations are overly restrictive, punitive, and lack sufficient statutory authority. They advocate for the withdrawal and re-proposal of the regulations, arguing they improperly expand the scope of DAF rules to the broader nonprofit sector and introduce unnecessary complexity and confusion.

The Los Altos Mountain View Community Foundation, representing a community foundation, opposes the proposed regulations because they would impose an overly broad definition of Donor Advised Funds (DAFs), create significant administrative burdens, and disrupt existing philanthropic programs. They argue the rules would negatively impact fiscally sponsored projects, disaster relief efforts, and the ability of community foundations to work with personal investment advisors.