No planned-giving officer is going to learn this from the IRS. She is going to learn it in October, from a donor's accountant, in a call that opens with the words so there's a form we have to file about the trust. And the second question in that call — the one that decides whether it is a bad afternoon or a bad quarter — is what your organization said to that donor, and in writing, and how long ago.
On July 9 the Treasury Department and the IRS published final regulations adding a new section to the income tax regulations, § 1.6011–15. Effective the same day. It identifies a particular charitable remainder annuity trust structure — and anything substantially similar to it — as a listed transaction. That is the sharpest label the reportable-transaction rules have. It pulls in Form 8886 for participants, Form 8918 for material advisors, and the penalties under section 6707A for anyone who was supposed to file and didn't.
Start with what is actually described, because it is narrower than the phrase “CRAT listed transaction” sounds, and a fundraiser who blurs that will scare a good donor off a legitimate gift.
(1) The grantor creates a trust purporting to qualify as a charitable remainder annuity trust under section 664(d)(1) … (2) The grantor funds the trust with property having a fair market value in excess of its basis … (3) The trustee sells the contributed property; (4) The trustee uses some or all of the proceeds from the sale of the contributed property to purchase an annuity; and (5) On a Federal income tax return, the beneficiary of the trust treats the annuity amount payable from the trust as if it were, in whole or in part, an annuity payment subject to section 72 of the Code, instead of as carrying out to the beneficiary amounts in the ordinary income and capital gain tiers of the trust in accordance with section 664(b).
Element five is the whole thing. Steps one through four describe a great many ordinary, properly drafted charitable remainder annuity trusts — appreciated stock in, trustee sells it, proceeds get invested, sometimes in an annuity contract. Nothing there is a shelter. It becomes the listed transaction at the moment somebody reports the payout as though it fell under section 72, the insurance-annuity rules, rather than carrying out the trust's own ordinary income and capital gain tiers. That is a reporting position taken on a return, usually by the donor's preparer, usually years after your gift officer shook hands with them.
Which brings us to the sentence your organization is relying on, whether or not anyone there has read it.
An organization described in section 170(c) of the Code that the purported charitable remainder annuity trust designates as a recipient of the remainder interest described in section 664(d)(1) is not treated as a participant under § 1.6011–4(c)(3)(i)(A) in the transaction described in this section solely by reason of its status as a recipient of the remainder interest described in section 664(d)(1).
Read the tail of it again. Solely by reason of its status. The regulation protects you for what you are — a name on a remainder interest, often one you did not know existed until a check arrived. A parallel paragraph does the same job for section 4965, so being named cannot make you a party to a prohibited tax shelter transaction either. Both are real, both are in the binding text, and both are worth knowing tonight.
Neither one says a word about what you did. Status is not conduct. And the conduct question in these rules has its own name: material advisor.
The one commenter on the proposed rule asked for exactly this — put it in writing that a charitable remainderman isn't a material advisor unless its materials endorse the abusive reading of the section 664(b) tier structure. Treasury and the IRS answered the question in the preamble and then declined to put it in the regulation, saying the existing rules “seem sufficiently clear in this context” and adopting the proposed regulations “as final without change.” So the analysis a nonprofit would want to hand its board is agency explanation, not regulatory text. It is not nothing — it is the IRS stating its own view of how § 301.6111–3 applies to you, and that view is favorable. It is also not the same document as the rule, and anyone telling your clients otherwise should be asked to point at the paragraph number.
A description of the effect of section 664(b) that includes, or a statement endorsing, the abusive interpretation of the application or operation of the tier structure under section 664(b) would be considered a tax statement … However, a mere suggestion or description of a trust qualifying as a CRAT would not be a statement relating to a tax aspect of the transaction that causes the transaction to be a reportable transaction. As a result … simply suggesting a donor's consideration of the creation of, or providing general information regarding, a trust qualifying as a CRAT would not be a tax statement that would result in the charity being a material advisor.
So the line is drawn through your own copy. Describe a CRAT, suggest a donor consider one, walk them through how the remainder works — fine, explicitly fine. Publish an illustration, a seminar slide or a planned-giving page that tells a donor the payments can be treated as annuity income under section 72, and you have made a tax statement about the exact position that makes this a listed transaction. There is a second lock on that door, and it is money: material-advisor status also requires gross income above a threshold, and for a listed transaction where substantially all the benefits go to individuals that threshold drops to $10,000. Most charities never charge a donor a dime for gift-planning help, and that alone keeps them out. Consultants, trust administrators and gift-planning software vendors bill well past ten thousand dollars, and they should read this paragraph twice.
The IRS estimates the number of taxpayers impacted at “between 50 to 100 per year.” The number of charities named on a CRAT remainder somewhere in America is a great deal larger than that, and every one of them is inside a rule written for fifty people.
Ninety calendar days from July 9. Under § 1.6011–4(e)(2)(i), when a transaction becomes listed after a return reflecting it has already been filed, a disclosure statement must go to the Office of Tax Shelter Analysis within 90 calendar days of the listing date — and it says plainly that this applies “regardless of whether the taxpayer participated in the transaction in the year the transaction became a listed transaction.” So a donor who did this in 2022 has a filing due this fall on a return that has been closed for years. That is the call your gift officer is going to get. October 31 is the other one: a person who had already done everything else becomes a material advisor on the listing date under § 301.6111–3(b)(4)(iii), which puts them in the third calendar quarter, and Form 8918 is due “by the last day of the month that follows the end of the calendar quarter.”
Kept honest: this is a reporting and disclosure rule, not a determination that any particular trust is invalid. Nothing here decides whether a specific CRAT qualifies under section 664(d)(1), and none of it is tax advice — the person who can tell a donor whether they participated is their own preparer, working from their actual returns. The five elements are conjunctive as written; a CRAT missing any one of them is not the transaction described, though the regulation also reaches transactions “substantially similar,” which is a judgment call belonging to counsel and not to a newsletter. The material-advisor discussion above is quoted from the preamble to TD 10051, and preamble text is the agency explaining how it reads existing rules — persuasive, published, and not the same thing as regulatory text; the IRS said as much when it declined to codify it. The October 7 and October 31 dates are arithmetic on the regulations quoted, applied to a July 9, 2026 listing date, not dates the IRS printed in the rule. And section 6707A caps the non-disclosure penalty for a listed transaction at $200,000 ($100,000 for a natural person) with a floor of $10,000 ($5,000 for a natural person) — a range wide enough that it is worth knowing which end a given filing sits at.
Sources (primary, verified today): Internal Revenue Service, Treasury, “Charitable Remainder Annuity Trust Listed Transaction,” final rule, TD 10051, RIN 1545–BQ58, 91 FR 42353 (July 9, 2026) — every quoted line of § 1.6011–15, the preamble discussion of material advisors, the “one comment” and “no public hearing” statements, the “sufficiently clear” and “as final without change” language, and the “between 50 to 100 per year” estimate are quoted from the govinfo PDF, text extracted with pypdf. The proposed rule it finalizes is REG–108761–22, 89 FR 20569 (March 25, 2024), cited in that document. Disclosure timing and thresholds are quoted from the Code of Federal Regulations, 26 CFR 1.6011–4(e) and 26 CFR 301.6111–3(b)(3), (b)(4) and (e), retrieved from the eCFR API as of the July 23, 2026 issue date. Penalty amounts are quoted from 26 U.S.C. 6707A(b). No trade coverage was used for any fact in this edition.
The IRS made a charitable remainder annuity trust structure a listed transaction on July 9. If your organization is named as remainderman on any CRAT, there is one sentence in that rule protecting you, and I want to be precise about how wide it is. Here is the sentence, from section 1.6011-15(c)(2): a section 170(c) organization designated as the remainder recipient "is not treated as a participant ... solely by reason of its status as a recipient of the remainder interest." Solely by reason of its status. That protects what you ARE. Named on a remainder interest, frequently one nobody at your shop knew existed. It is real, it is in the binding text, and there is a parallel paragraph doing the same job for section 4965 so that being named can't make you a party to a prohibited tax shelter transaction. It does not say one word about what you WROTE. First, what actually got listed, because the shorthand "CRAT listed transaction" will scare good donors off legitimate gifts. Five elements, and all five have to be there: 1. Grantor creates a trust purporting to qualify under 664(d)(1) 2. Funds it with appreciated property 3. Trustee sells the property 4. Proceeds buy an annuity 5. The beneficiary reports the payout as if it were a section 72 annuity payment, instead of carrying out the trust's ordinary income and capital gain tiers under 664(b) One through four describe an enormous number of perfectly ordinary charitable remainder trusts. Five is the abuse. And five happens on somebody else's tax return, years after your gift officer shook their hand. So where does a charity get into trouble? Material advisor status. The commenter on the proposed rule asked Treasury to write into the regulation that a charitable remainderman isn't a material advisor unless its materials endorse the abusive 664(b) reading. Treasury answered in the preamble, said the existing rules "seem sufficiently clear in this context," and adopted the proposal "as final without change." The preamble's answer is genuinely good news. Suggesting a donor consider a CRAT, or giving general information about how one works, is NOT a tax statement and does not make you a material advisor. Endorsing the abusive reading of the tier structure is. Which means the line runs straight through your own marketing copy. Go search your site this week for "section 72" and for the word "annuity." You are looking for any page, PDF, illustration or seminar deck that tells a donor CRAT payments can be treated as annuity income rather than under the tier structure. Twenty minutes. It is the entire question. Two dates, and they are not for the same people: OCTOBER 7 - ninety calendar days from the listing. Under 1.6011-4(e)(2)(i), when a transaction becomes listed after a return reflecting it was already filed, disclosure goes to OTSA within 90 days, "regardless of whether the taxpayer participated in the transaction in the year the transaction became a listed transaction." A donor who did this in 2022 has a filing due this fall. OCTOBER 31 - Form 8918 for material advisors. Under 301.6111-3(b)(4)(iii) anyone who had already done everything else becomes a material advisor ON the listing date, which lands them in Q3, and the form is due the last day of the month after quarter end. The material advisor threshold for a listed transaction with individual beneficiaries is $10,000 of gross income. Charities that charge donors nothing are out on that alone. Consultants and vendors are not. One more number, because it says something about how this happened. The proposed rule sat from March 2024 to July 2026 and drew exactly one public comment. No hearing - nobody asked to speak. The IRS estimates it affects "between 50 to 100" taxpayers a year. The number of charities sitting on a CRAT remainder somewhere in America is not fifty to a hundred. Every one of them is now inside a rule written for fifty people, and the part that decides where they stand isn't in the rule at all. It's in the preamble, and it's about their own website. Source: TD 10051, 91 FR 42353, July 9, 2026, quoted from the govinfo PDF; timing and thresholds from 26 CFR 1.6011-4(e) and 301.6111-3. This is a disclosure rule, not advice about any particular trust, and the person who can tell a donor whether they participated is their own preparer.
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FIRST SOURCE · one verified original-source finding, composed for one reader · this edition: nonprofit fundraising — written for the consultants, campaign counsel, planned-giving shops and communications firms whose clients are about to be asked what the organization told that donor, and when