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Broadly speaking, the notice’s require- LINE
ments are intended to ensure that the ITEMS
LLC is organized and operated exclusive-
ly for exempt purposes, including that its
assets are dedicated to an exempt purpose
and do not benefit private interests.
More specifically, an LLC is required to
include the following language in both its
articles of organization and its operat-
ing agreement:
■ Provisions requiring that each
member of the LLC be either
an organization described in Sec.
501(c)(3) and exempt from taxation SSA wage base increases for 2022
under Sec. 501(a) or a governmental The maximum amount of an individual’s taxable earnings in 2022 subject to
unit described in Sec. 170(c)(1) (or a Social Security tax is $147,000, the Social Security Administration (SSA)
wholly owned instrumentality of such announced. An increase from $142,800 for 2021, the wage base limit applies to
a governmental unit); earnings subject to the tax, known officially as the old age, survivors, and dis-
■ Express charitable purposes and ability insurance (OASDI) tax. Because the OASDI tax rate is 6.2%, an employee
charitable dissolution provisions in with total wages from an employer at or above the maximum in 2022 will pay
compliance with Regs. Secs. $9,114 in tax, with the employer paying an equal amount. The Medicare hospital
1.501(c)(3)-1(b)(1) and (4); insurance tax of 1.45% each for employees and employers has no wage limit and
■ The express Chapter 42 compliance is unchanged for 2022.
provisions described in Sec. 508(e)(1), The SSA also announced a cost-of-living adjustment (COLA) for benefits
if the LLC is a private foundation; payable in 2022 of 5.9%, compared with a COLA increase for 2021 of 1.3%.
and
■ An acceptable contingency plan (such IRS Chief Counsel outlines R&D credit refund requirements
as suspension of its membership rights In Chief Counsel Memo 20214101F, highlighted by IRS News Release
until a member regains recognition of IR-2021-203, the IRS Office of Chief Counsel delineated the information
its Sec. 501(c)(3) status) in the event taxpayers must provide to establish a valid claim for refund of a credit for
that one or more members cease to increasing research activities, or research and development (R&D), under Sec. 41.
be Sec. 501(c)(3) organizations or Specifically, taxpayers must identify all business components to which the claim
governmental units (or wholly owned relates for that year. For each business component, they must identify all research
instrumentalities thereof). activities performed, all individuals performing each activity, and all information
The rules are slightly different if an each individual sought to discover. They must also provide the total qualified
LLC is formed in a state whose LLC law expenses for employee wages, supplies, and contract research for the claim year.
restricts the ability to add such provisions The memo also described the format in which the information must be submitted
to the articles of organization. In that and discussed the limitation periods for submitting claims. The AICPA has asked
case, these requirements will generally be the IRS (see comment letter at tinyurl.com/tmf568us) to delay implementation
deemed satisfied if the LLC’s operating of these requirements beyond the planned end of a “grace period” on Jan. 10,
agreement includes the required provi- 2022, to allow adequate time for comment and response.
sions, so long as the articles of organiza-
tion and operating agreement do not 6-year limitation period applies to entire return
include any inconsistent provisions, the In Chief Counsel Advice (CCA) 202142009, the IRS Office of Chief Counsel
notice says. advised that the extended six-year statute of limitation on assessment under Sec.
■ Notice 2021-56 6501(e)(1)(C) applies to an entire return, not just to items related to Subpart F
income where those items were omitted from the return. The CCA also con-
— By Dave Strausfeld, J.D., a JofA cluded that an agreement to extend the period of limitation for assessment under
senior editor. Sec. 6501(c)(4) did not also extend the limitation period for filing a claim for
credit or refund when the agreement was entered into after the credit or refund
Tax Matters editor Paul Bonner can be limitation period under Sec. 6511(a) had expired but before the expiration of the
reached at Paul.Bonner@aicpa-cima.com or six-year assessment period.
919-402-4434. ■

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