Welcome to EO Radio Show - Your Nonprofit Legal Resource. I'm Cynthia Rowland, and today's episode is the third in a series of several critical compliance topics relevant to international grantmaking by U.S. public charities and private foundations. These three rules are anti-terrorism rules, income tax withholding rules, and some special rules for private foundations.

All U.S. charitable organizations that make grants to organizations or individuals not resident in the United States need to be aware of a couple of general requirements, and private foundations have an extra set of concerns to ensure that the expenditure by the private foundation outside the United States is not penalized as a taxable expenditure and does count toward the foundation's minimum distribution requirement.

This third installment focuses on the special private foundation rules regarding expenditure responsibility and equivalency determination. I also touch on the penalties when there is a footfall or a problem with the international grant.

In the first episode of this series, I focused on the Patriot Act rules that apply to all grants, international and domestic. In the second episode, I provided a brief overview of the income tax withholding rules that apply to payments for services and that come into play when making a grant to an international organization that provides some services in the United States.

Show Notes:

Farella YouTube podcast channel

EO Radio Show #99: Nonprofit Basics: International Grantmaking - Part 1 Overview and Antiterrorism Rules

EO Radio Show #101: Nonprofit Basics: International Grantmaking – Part 2 Income Tax Withholding Rules

EO Radio Show #58: Nonprofit Basics: What Nonprofits Need To Know About Expenditure Responsibility Grant Requirements

EO Radio Show #91: REFRESH Nonprofit Basics: Navigating the Complex Rules That Describe a Public Charity

IRS Guidance on Private Foundation Grants to Foreign Organizations

• IRC Section 4945(h) - Expenditure Responsibility Issue Snapshot
• Grants by Private Foundations: Expenditure Responsibility
• Audit Technique Guides

Revenue Procedure 2017-53

If you have suggestions for topics you would like us to discuss, please email us at eoradioshow@fbm.com. Additional episodes can be found at EORadioShowByFarella.com.

DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.