I

104TH CONGRESS

1ST SESSION H. R. 32

To amend the Internal Revenue Code of 1986 to ensure that charitable

beneficiaries of charitable remainder trusts are aware of their interests

in such trusts.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. GIBBONS introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to ensure

that charitable beneficiaries of charitable remainder

trusts are aware of their interests in such trusts.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. REQUIRED NOTICES TO CHARITABLE BENE4 FICIARIES OF CHARITABLE REMAINDER

5 TRUSTS.

6 (a) GENERAL RULE.—

7 (1) Section 6036 is amended—
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1 (A) by striking ‘‘Every receiver’’ and in2 serting ‘‘(a) GENERAL RULE.—Every receiver’’,

3 and

4 (B) by adding at the end thereof the fol5 lowing new subsection:

6 ‘‘(b) SPECIAL RULE FOR TRANSFERS OF REMAINDER

7 INTERESTS DESCRIBED IN SECTION 2055(e)(2)(A).—In

8 the case of an estate claiming a charitable contribution

9 deduction for the value of a transfer of a remainder inter10 est in property described in section 2055(e)(2)(A), the ex11 ecutor or other fiduciary shall provide a written notice to

12 each organization described in section 2055(a) which has

13 such an interest in the time and manner set forth in the

14 following paragraph:

15 ‘‘(1) TAX RETURN FILING NOTICE.—On or be16 fore the due date for the filing of a Federal estate

17 tax return on which a charitable deduction is

18 claimed, the charitable beneficiary shall be notified

19 of such filing and such notice shall include—

20 ‘‘(A) the name, address, and date of death

21 of the decedent;

22 ‘‘(B) the name, address, and identification

23 number of each fiduciary of the estate;

24 ‘‘(C) the name and address of each chari25 table beneficiary;
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1 ‘‘(D) a copy of the governing instrument

2 relating to the transfer in trust; and

3 ‘‘(E) a description of the interest to which

4 such charitable organization may be entitled,

5 and any preliminary statements (if required by

6 law) on the financial condition of the estate.’’

7 (2) Section 6034A is amended by adding at the

8 end thereof the following new subsection:

9 ‘‘(c) ANNUAL NOTICE TO CHARITABLE REMAINDER

10 BENEFICIARY.—

11 ‘‘(1) IN GENERAL.—The fiduciary of any chari12 table remainder trust required to file any return

13 under chapter 61 for any taxable year shall on or

14 before the date on which such return is required to

15 be filed, furnish each charitable beneficiary—

16 ‘‘(A) a copy of such return (including all

17 schedules), and

18 ‘‘(B) such other information (or deletions)

19 for purposes of carrying out the internal reve20 nue laws as the Secretary may require.

21 If a fiduciary furnishes the information required under the

22 preceding sentence to any charitable beneficiary with re23 spect to any trust taxable year, such fiduciary shall not

24 be required to furnish information under the preceding

25 sentence to such beneficiary with respect to any subse-
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1 quent trust taxable year unless such beneficiary agrees to

2 reimburse such fiduciary for the reasonable costs of fur3 nishing such information.

4 ‘‘(2) PENALTIES.—

‘‘For provisions relating to the failure to furnish

on a timely or complete basis the information required under paragraph (1), see section 6652(c).’’

5 (b) PENALTIES.—

6 (1) Paragraph (2) of section 6652(c) is amend7 ed to read as follows:

8 ‘‘(2) RETURNS UNDER SECTION 6034 OR 6043(b)

9 AND NOTICES UNDER SECTION 6034A(c) OR

10 6036(b).—

11 ‘‘(A) PENALTY ON ORGANIZATION, TRUST,

12 OR FIDUCIARY.—In the case of—

13 ‘‘(i) a failure to file a return required

14 under section 6034 (relating to returns by

15 certain trusts) or section 6043(b) relating

16 to terminations, etc., of exempt organiza17 tions),

18 ‘‘(ii) a failure to furnish any notice re19 quired under section 6034A(c) (relating to

20 annual notice to charitable remainder ben21 eficiary), or

22 ‘‘(iii) a failure to furnish any notice

23 required under section 6036(b) (relating to

24 tax return filing notice),
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1 on the date and in the manner prescribed there2 fore (determined with regard to any extension

3 of time for filing), there shall be paid by the or4 ganization, trust, or fiduciary failing to file

5 such return (or furnish such notice) $10 for

6 each day during which such failure continues,

7 but the total amount imposed under this sub8 paragraph on any organization, trust, or fidu9 ciary for failure to file any 1 return or furnish

10 any 1 notice) shall not exceed $5,000.

11 ‘‘(B) MANAGERS.—The Secretary may

12 make written demand on an organization, trust,

13 or fiduciary failing to file any return (or furnish

14 any notice) under subparagraph (A) specifying

15 therein a reasonable future date by which such

16 filing (or furnishing) shall be made for purposes

17 of this subparagraph. If such filing (or furnish18 ing) is not made on or before such date, there

19 shall be paid by the person responsible for fail20 ing to so file (or furnish) $10 for each day after

21 the expiration of the time specified in the writ22 ten demand during which such failure contin23 ues, but the total amount imposed under this

24 subparagraph on all persons for failure to file
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1 any 1 return or furnish any 1 notice) shall not

2 exceed $5,000.’’

3 (c) EFFECTIVE DATE.—

4 ‘‘(c) EFFECTIVE DATE.—The amendment made to

5 section 6034A shall take effect with respect to returns for

6 taxable years beginning after December 31, 1994. The

7 amendment made to section 6036 shall take effect for de8 cedents dying after January 6, 1995; Provided, however,

9 That the fiduciary or executor of any estate of a decedent

10 dying after December 31, 1989, which claimed or is claim11 ing a charitable deduction for the value of transfer of a

12 remainder interest in property described in section

13 2055(e)(2)(A) shall provide a qualification notice to the

14 charitable remainder beneficiary not later than December

15 31, 1996.’’

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