Final Regulations: The Latest IRS Action to Counter Aggressive CRAT Positions

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Final Regulations: The Latest IRS Action to Counter Aggressive CRAT Positions

September 07, 2026

TAX NOTES FEDERAL

A Charitable Remainder Annuity Trust (“CRAT”) can be a valid tax-planning tool.  It generally allows for tax deferral on appreciated property, creation of constant income streams, and charitable tax deductions.  The problem, according to IRS, is that some people are distorting a good thing; they are improperly interpreting the rules to create tax avoidance, as opposed to tax postponement and reduction.  This article by Partner Hale Sheppard explores several actions that the IRS has taken over the past decade to combat the supposed problem, culminating in the passage of final regulations classifying certain dealings with CRATs as “listed transactions.”

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halesheppard@eversheds-sutherland

Hale E. Sheppard

Partner

Atlanta, United States

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