Tax deductions claimed by Americans for charitable contributions rose to $193.6-billion in 2007, an increase of 3.7 percent from the $186.6-billion claimed in 2006, according to statistics released by the Internal Revenue Service.

“Most of this increase was from other-than-cash contributions, which went up by 11.6 percent from 2006 to $58.7-billion,” the IRS said.

After adjusting for inflation, deductions for charitable contributions rose 0.9 percent from 2006 to 2007, the tax agency said. “This was a reversal from a decrease in real terms for 2006, but it marks the fourth year out of five years that real charitable contributions have increased,” the IRS said.

The new figures show that the average contribution claimed on donors’ tax returns rose from $4,504 in 2006 to $4,708 in 2007, an increase of 4.5 percent and the highest average donation recorded in the more than...

The number of charitable organizations that filed federal informational tax returns rose from 286,615 in 2005 to 301,214 in 2006, an increase of 5.1 percent, according to a newly released report from the Internal Revenue Service.

The tax returns — the Form 990 and the Form 990-EZ — include information about charity finances, activities, and compensation of top officials.

Charities reported $1.37-trillion in revenue, 9.4 percent more than the $1.25-trillion in 2005.

The charitable groups held nearly $2.55-trillion in assets, an increase of 13.7-percent compared with 2005, while their liabilities increased by 12.2-percent, to $932-billion.

The figures do not include charitable organizations that did not have to file the Form 990 or Form 990-EZ, including most churches and certain religious organizations, as well as most organizations with gross annual receipts totaling less than $...

The Internal Revenue Service has released a “compliance guide” for charities that discusses the activities that could jeopardize an organization’s tax-exempt status.

The publication also identifies “general compliance requirements on record-keeping, reporting, and disclosure” for charitable organizations.

Among many topics discussed in the guidebook:

• Federal informational tax returns or notices that must be filed by charities.

• “Record-keeping: why, what, when.”

• “Governance considerations.”

• “Changes to be reported to the IRS.”

• “Required public disclosures.”

• “Resources for public charities.”

The Internal Revenue Service has announced its annual changes affecting charitable deductions when charities provide low-cost premiums to contributors in fund-raising campaigns.

The IRS announcement updates the rules on deductions for 2010 to account for inflation.

Federal law allows donors to take charitable deductions only for the portions of their contributions that are outright gifts. Donors must subtract the value of any item they receive in return for their gift, not including token items of nominal value.

The IRS said that a charity could tell a donor that gifts are fully deductible if:

• The donor gave $48 or more and received a premium worth $9.60 or less. In 2009 those figures were $47.50 and $9.50.

• The donor received premiums that had a fair-market value equal to no more than 2 percent of the amount of the contribution, or $96, whichever was less. In 2009 the ...

The Internal Revenue Service has released a “guide sheet” and a “checklist” to help its agents as they gather data about the governance practices and related internal controls of charities they are auditing.

“The data collected will be included in a long-term study to gain a better understanding of the intersection between governance practices and tax compliance,” the IRS said.

Michael W. Peregrine, a lawyer in Chicago who advises nonprofit organizations, says the materials released by the IRS “demonstrate that, to the IRS, charity governance is a serious matter.”

The IRS’s interest in charities’ governance practices has been controversial. The federal tax code does not explicitly set out governance standards for the IRS to enforce, but the tax agency has shown increasing interest in keeping an eye on the governance practices of organizations.

The IRS’s revised Form 990...

The Internal Revenue Service has started a new audit program that will try to stop very rich individuals from using “complex financial arrangements” — including private foundations — to avoid paying taxes.

The new Global High Wealth Industry group “will centralize and focus IRS compliance expertise involving high-wealth individuals and their related entities, which can often have an international component,” Douglas H. Shulman, Commissioner of Internal Revenue, told a Washington conference of the American Institute of Certified Public Accountants.

“For a variety of reasons, including valid business reasons, many high-wealth individuals make use of sophisticated financial, business, and investment arrangements with complicated legal structures and tax consequences,” Mr. Shulman said. “Many of these arrangements are entirely above board; others mask aggressive tax strategies.”

Mr....

The Internal Revenue Service has developed for its Web site a case study — and a series of videos — designed to help charities better understand what is required of them in the Form 990, the informational tax return that the IRS redesigned for the 2008 tax year.

The materials, called “The New Form 990: Getting Started,” were created by the IRS’s Exempt Organizations division “to help illustrate key points and answer important questions” about the revised form, the tax agency said.

The materials begin with a written set of facts that detail the organizational and financial aspects of a hypothetical charity, the Exempt Organization for Disaster Relief, which was “formed” to help people in three states.

Next comes a filled-out Form 990 with two schedules that show how the hypothetical organization would properly complete the annual return.

The IRS then offers seven videos, each...

Independent Sector, a national coalition of charities and foundations, has renewed its call for Congress to ease rules that require charities and other employers to make certain payments to “defined-benefit” pension funds.

The Pension Protection Act of 2006 made significant revisions to the so-called minimum funding rules for employers that provide pension plans with defined benefits, or specific amounts of money, to retired workers.

Nonprofit groups “have endeavored to meet the significantly increased minimum funding obligations imposed by the Pension Protection Act while maintaining programs upon which individuals and communities rely,” Independent Sector said in a statement issued as the House Ways and Means Committee met to discuss pension plans.

“The abrupt [stock] market decline last year turned those pension funding obligations into a severe problem never anticipated when...

The Internal Revenue Service has released the sixth in a series of filing tips to help nonprofit organizations prepare their Form 990 federal informational tax return, the primary document that groups file each year.

The latest batch of advice explains why only certain types of attachments to the Form 990 are permitted.

When the IRS redesigned the Form 990 for the 2008 tax year, it created a “core form” to be filed by all organizations and a series of schedules that some groups must also submit on such topics as executive compensation and noncash contributions.

The IRS included a Schedule O for reporting any information that does not fit on the core form or the other schedules.

“The form was redesigned, in part, to promote uniform reporting and to provide a structured format for attaching information to the form,” the IRS said in its new tips.

Thus, nonprofit organizations are...

The Internal Revenue Service has released proposed regulations that would require a special type of nonprofit group to distribute at least 5 percent of its assets each year for charitable purposes.

At issue: so-called supporting organizations — charities that carry out their mission by supporting specific other groups, including hospitals and colleges.

The rules, issued by the IRS and the Treasury Department, were required by provisions of the federal Pension Protection Act of 2006, which Congress passed in an effort to crack down on abuses.

The IRS proposal focuses on so-called Type III supporting organizations, which are groups that “are operated in connection with” their supported organizations.

Organizations are classified as Type III based on two standards, one of which is called an “integral part” test.

One way a supporting organization can meet the integral part...