Take-Away: The tax consequences with regard to transfers to charitable remainder trusts are very tricky and detailed. If those rules are not carefully followed by the donor, the penalty can be very high income taxes, interest and penalties.

Take-Away: An IRA might name a charitable remainder unitrust (CRUT) as its beneficiary to delay the recognition of the IRA’s ordinary income longer than the SECURE Act’s normal 10-year distribution rule, while also creating a charitable estate tax deduction for the CRUT’s remainder interest, which may become more important if the IRA owner dies after 2025.

Take-Away: A donor who makes a contribution to a donor advised fund (DAF) does not possess legal standing to sue the fund for breaching its fiduciary duties. The sponsoring charity possesses ‘exclusive ownership and rights of control’ over DAF assets.

If passed, the SECURE Act 2.0 may contain a more liberal qualified longevity annuity contract (QLAC) option for plan participants. Qualified retirement plan sponsors need to proceed with caution if they offer an annuity option within a 401(k) or defined contribution pension plan in light of their ERISA-imposed fiduciary duties.

Take-Away: As has been periodically reported throughout 2022, there has been some hope that we would see Congress pass what has been called SECURE Act 2.0 before the end of 2022 liberalizing some of the rules that pertain to retirement plan distributions. Currently we hold our breath to see if this legislation gets passed before the end of 2022.

While we may grouse about many of the distribution changes under the SECURE Act, the automatic waiver of the 50% excise tax for the failure to take a year-of-death required minimum distribution (RMD) is a welcome change under the Act.

Since the Tax Code does not contemplate an ‘endowed’ donor advised fund, there is a risk that a donor will be denied a charitable income tax deduction with respect to contributions made to the ‘endowed’ donor advised fund.

To start the statute of limitations running on the excise tax that arises with an excess contribution to a qualified retirement account, it is imperative that a Form 5329 be filed for the tax year in question. Even if the statute of limitations runs on the individual’s Form 1040 income tax return, that will not prevent the IRS from pursuing the excise tax for an excess contribution to a retirement account if no separate Form 5329 is not filed.

Each year the IRS and the Department of Treasury publish what they call their ‘Priority Guidance Plan’ (the Plan) for the next 12 months. The most recent Plan was published in Notice 2022-21 (November 4, 2022) for the period that runs from July 1, 2022 to June 30, 2023. There are over 205 guidance projects in the Plan. Some of the guidance projects that relate to estate and retirement planning are summarized below.

There is a noticeable trend in the U.S. Tax Court of the IRS successfully challenging claimed charitable income tax deductions due to the donor’s failure to substantiate the deduction in accordance with the IRS’s stated instructions. These are cases where a ‘substantial compliance’ with the rules is not enough to preserve a charitable income tax deduction.