A Word About Income Tax Withholding

Please be sure to express to the financial institution that your organization is tax-exempt and provide the documentation. RIFT has found that some financial institutions will withhold federal income tax when distributing a death claim to a charity. This should NEVER happen for IRAs, however. RIFT is trying to get the financial institutions to stop doing this practice from 401(k), 403(b) and other qualified retirement plans. If this happens to your organization, immediately write to the general counsel and send the check back asking them to re-issue the check in the full amount of the proceeds due to your organization without any federal income tax withholding because your organization is tax-exempt. If they will not adhere to your exception request, then your organization will have to receive an IRS Form 1099-R from the financial institution and claim that amount when filing the charity’s income tax return for that tax year. That is a long, drawn out process and could take a couple of years.

Note with Fidelity qualified retirement plans: If the account is a 401(k), Fidelity states to not use the NetBenefits platform to request your death benefit as that platform will withhold federal income tax on your death benefit. Instead, Fidelity’s lawyer stated, "Generally charitable organizations should call in to our toll free number to request a distribution from an inherited 401(k) plan instead of using NetBenefits. The Fidelity representative should be able to adjust the federal tax withholding on the distribution to the charity."

Cryptocurrency Memorandum released by IRS

January 13, 2023

Read the IRS Memorandum on the qualified appraisal requirement for charitable contributions of cryptocurrency.

View Full Memo

Jessica Hall

Jessica Hall joined CGP in October 2022 as the new Director of Membership and Marketing. Jessica is responsible for the strategic management, marketing, and implementation of membership recruitment, programs, and services. She serves as liaison to council leaders to provide technical and governance support, articulate policy, resolve problems and build relationships to maintain existing councils and recruit the formation of new councils. She develops national marketing strategies that promote brand recognition across print and web platforms.