Pandemic Provides Basis for Successful Set-Aside Requests

The IRS approved a private foundation's set-aside program, reflecting the “tremendous impact the COVID 19 shutdown” in a state “has had on all current construction projects” (Priv. Ltr. Rul. 202053017). The purpose of the requested set-aside “is to ensure that these projects will be properly managed, monitored and brought to a satisfactory and quality conclusion in a successful and timely manner.” The foundation asserted it would not be prudent to pay the contractors the total amount prior to the completion of the entire job.” It observed that, due to the pandemic, the “timelines for when these projects will be completed is uncertain.” The final successful argument was that this set-aside approach will allow the foundation to “maximize control over the projects, with the goal of a achieving a better and successful result.”