IRS Flags Charitable Annuity Trusts as Reportable Deals
Published Date: 7/9/2026
Rule
Summary
Starting July 9, 2026, certain Charitable Remainder Annuity Trust deals must be reported to the IRS by advisors and participants, or they could face penalties. Charities just receiving money aren’t caught up in these rules, so they’re in the clear. This change helps the IRS keep a closer eye on tricky tax moves involving these trusts.
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
CRAT deals must be reported to IRS
Starting July 9, 2026, certain charitable remainder annuity trust (CRAT) arrangements that match the rule must be reported to the IRS by material advisors and by participants whose returns reflect the described tax treatment. Advisors and participants who fail to file the required disclosures may be subject to penalties, and the IRS expects between 50 to 100 taxpayers a year will be impacted and reporting will be made using the existing disclosure processes (Forms 8886 and 8918).
Charities receiving remainders are exempt
An organization described in section 170(c) that is named as the remainder beneficiary of a purported CRAT is not treated as a participant in the listed transaction solely because it is the remainder recipient, and is not treated as a party to the transaction for purposes of section 4965 solely for that reason. This carve-out applies under the final rule effective July 9, 2026.
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