Laura L. Brownfield
General Counsel

On February 29, 2024, the Department of Treasury issued a notice of a public hearing on the Proposed Regulations which will be held on May 6, 2024, at the IRS.  In November 2023, the Department of Treasury released the first installment of proposed regulations providing guidance on certain tax rules applying to donor advised funds (“DAFs”) including excise taxes on taxable distributions made by a sponsoring organization from a donor advised fund (DAF), and on the agreement of certain fund managers to the making of such distributions.

The Treasury seeks to provide guidance regarding DAFs and taxable distributions which apply to certain organizations, including community foundations and other charitable organizations, that maintain one or more DAFs, and to other persons involved with the DAFs, including donors, donor-advisors, related persons, and investment advisors. The Proposed Regulations expand the definition of a donor-advisor to include an investment advisor serving in a dual capacity of investing both the DAF assets and the personal assets of a donor. The Proposed Regulations broadly interpret whether a fund will be treated as a DAF and will effectively convert other charitable funds established at community foundations as DAFs subjecting these funds to the DAF regulations. The Community Foundation submitted comments to the IRS on February 15, 2024. You may view comments from the public posted by the Internal Revenue Service here.

Note: This material was developed by Community Foundation for Southeast Michigan. It is published with the understanding that neither the publisher nor the author is engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a professional advisor should be sought.