Tax Exempt Organizations

Gown vs. State

It is no secret that the Administration[i] is not pleased with many tax-exempt organizations, especially those “elite” private colleges and universities that, according to the White House and other observers, are hostile toward individuals and organizations that express conservative opinions or openly support “Western values.” The same institutions are often accused of promoting what has been described by some as virulent “anti-Americanism.”

Continue Reading Proposed Regs, Discrimination by Private Schools, and The Loss of Tax-Exempt Status

The Latest

The IRS recently announced its intention to propose regulations relating to the 21 percent tax[i] imposed with respect to any “excess” executive compensation paid by certain tax-exempt organizations, including public charities and private foundations (i.e., charitable organizations),[ii] to their covered employees.[iii]

This news followed by almost a year the amendment to the definition of “covered employee” made by OBBBA,[iv] which represents Congress’s latest effort at trying to limit the amount of executive compensation payable by a charitable organization.  

Continue Reading Congress’s Continuing Quest to Restrict Executive Compensation at Charitable Organizations, With a Twist

The Nonprofit Sector

According to a report released earlier this year by the Federal Reserve Bank of Richmond, nonprofit organizations contribute more than 5 percent of the nation’s GDP and account for almost 10 percent of “private sector” employment.[i]

Those are impressive statistics and, understandably, may be interpreted as characteristic of an industry that constitutes a significant economic driver, at least until one realizes the significant “public” source of the nonprofit sector’s revenues.

Continue Reading OBBBA and the Self-Imposed Tax Known as Charitable Giving

In the tax world, when someone refers to a “charitable” organization, it is likely they are using the term in its generally accepted legal sense to include not-for-profit corporations or charitable trusts that are organized and operated “exclusively”[i] for religious, charitable,[ii] scientific, literary, educational, or other specified purposes.[iii]

Continue Reading The Uncharitable Treatment of Tax-Exempt Charities? Maybe, Maybe Not

Legal Laissez-Faire?

Few provisions of the Code have a single, clear meaning that leaves no room for interpretation. Even many of those that, on the surface, appear fairly straightforward, are usually open to alternative “understandings.”

In the absence of continuous monitoring, implementation (as in the form of regulations),[i] and enforcement, there are taxpayers that may slant a particular provision of the Code to capture a more favorable result than Congress may have intended, especially when a taxpayer is facing financial pressures, whether attributable to the broader economy, their region or industry, or something else.

Continue Reading Observations on Charities, Taxes, and Cash Flow

Do This But Not That

Charitable organizations are dependent, in no small part, upon the financial support of many successful business owners. The generosity of these individuals and their organizations may be a manifestation of several factors including, for example, their gratitude to the communities in which they have thrived, a willingness to share their good fortune for the benefit of others, and – less altruistically – a desire for public recognition[i] and the “incidental” benefits arising therefrom.[ii]

Continue Reading Transferring the Family Business To A Private Foundation? Are You Sure About That?

WTF

It appears that many of the country’s colleges and universities[i] believe they have not already contributed enough to the decline of American education and to the erosion of our society, generally.

These institutions of so-called higher learning are not satisfied with having introduced major studies in subjects that can only be described as laughable, diluted academic standards, misrepresented history, encouraged identity politics, adopted cancel culture, stifled free speech, vilified Judeo-Christian values, and demonized Western civilization.

Continue Reading Activities Contrary to Public Policy – Revoking the Tax Exempt Status of Universities