I

103D CONGRESS

1ST SESSION H. R. 771

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

FEBRUARY 3, 1993

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 written notices 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 paragraphs:

15 ‘‘(1) QUALIFICATION NOTICE.—Within 60 days

16 of the date of the executor’s qualification, the chari17 table beneficiary shall be notified of such qualifica18 tion and such notice shall include—

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

20 of the decedent;

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

22 number of each fiduciary of the estate;

23 ‘‘(C) the name and address of each chari24 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) TAX RETURN FILING NOTICE.—On or be8 fore the due date for the filing of a Federal estate

9 tax return on which a charitable deduction is

10 claimed, the charitable beneficiary shall be notified

11 of such filing and such notice shall include—

12 ‘‘(A) a copy of the pertinent parts of the

13 Federal estate tax return, and

14 ‘‘(B) such other information as may be re15 quired by form or regulation.

16 If any notice is provided to a charitable beneficiary under

17 paragraph (1), no notice shall be required to be provided

18 to such beneficiary under paragraph (2) unless such bene19 ficiary agrees to reimburse the executor or other fiduciary

20 for the reasonable costs of providing such notice.’’

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

22 end thereof the following new subsection:

23 ‘‘(c) ANNUAL NOTICE TO CHARITABLE REMAINDER

24 BENEFICIARY.—
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1 ‘‘(1) IN GENERAL.—The fiduciary of any chari2 table remainder trust required to file any return

3 under chapter 61 for any taxable year shall on or

4 before the date on which such return is required to

5 be filed, furnish each charitable beneficiary—

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

7 schedules), and

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

9 for purposes of carrying out the internal reve10 nue laws as the Secretary may require.

11 If a fiduciary furnishes the information required under the

12 preceding sentence to any charitable beneficiary with re13 spect to any trust taxable year, such fiduciary shall not

14 be required to furnish information under the preceding

15 sentence to such beneficiary with respect to any subse16 quent trust taxable year unless such beneficiary agrees to

17 reimburse such fiduciary for the reasonable costs of fur18 nishing such information.

19 ‘‘(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).’’

20 (b) PENALTIES.—

21 (1) Paragraph (2) of section 6652(c) is amend22 ed to read as follows:
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1 ‘‘(2) RETURNS UNDER SECTION 6034 OR 6043(b)

2 AND NOTICES UNDER SECTION 6034A(c) OR

3 6036(b).—

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

5 OR FIDUCIARY.—In the case of—

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

7 under section 6034 (relating to returns by

8 certain trusts) or section 6043(b) relating

9 to terminations, etc., of exempt organiza10 tions),

11 ‘‘(ii) a failure to furnish any notice re12 quired under section 6034A(c) (relating to

13 annual notice to charitable remainder ben14 eficiary), or

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

16 required under section 6036(b) (relating to

17 a qualification notice or tax return filing

18 notice),

19 on the date and in the manner prescribed there20 fore (determined with regard to any extension

21 of time for filing), there shall be paid by the or22 ganization, trust, or fiduciary failing to file

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

24 each day during which such failure continues,

25 but the total amount imposed under this sub-
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1 paragraph on any organization, trust, or fidu2 ciary for failure to file any 1 return or furnish

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

4 ‘‘(B) MANAGERS.—The Secretary may

5 make written demand on an organization, trust,

6 or fiduciary failing to file any return (or furnish

7 any notice) under subparagraph (A) specifying

8 therein a reasonable future date by which such

9 filing (or furnishing) shall be made for purposes

10 of this subparagraph. If such filing (or furnish11 ing) is not made on or before such date, there

12 shall be paid by the person responsible for fail13 ing to so file (or furnish) $10 for each day after

14 the expiration of the time specified in the writ15 ten demand during which such failure contin16 ues, but the total amount imposed under this

17 subparagraph on all persons for failure to file

18 any 1 return or furnish any 1 notice) shall not

19 exceed $5,000.’’

20 (c) EFFECTIVE DATE.—

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

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

23 taxable years beginning after December 31, 1992. The

24 amendment made to section 6036 shall take effect for de25 cedents dying after January 6, 1993; Provided, however,
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1 That the fiduciary or executor of any estate of a decedent

2 dying after December 31, 1989, which claimed or is claim3 ing a charitable deduction for the value of transfer of a

4 remainder interest in property described in section

5 2055(e)(2)(A) shall provide a qualification notice to the

6 charitable remainder beneficiary not later than December

7 31, 1994.’’

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