The IRS issued Notice 2018-54, 2018-24 IRB and an accompanying News Release, stating that it intends to propose regulations addressing the federal income tax treatment of certain payments made by taxpayers to state-established “charitable funds” for which they receive a credit against their state and local taxes. Such funds were designed as a workaround adopted by a number of states to avoid the new limits on the state and local tax deduction under the Tax Cuts and Jobs Act. The Notice indicates that the characterization of these payments would be determined under the Internal Revenue Code and informed by substance-over-form principles, and not the label assigned by the state.