EO Tax Journal

1 – Letters to the Editor of the Baltimore Sun (hospital CEOs maligned!)

2 – Lawmakers Love Their Charities and Their Corporate Sponsors (N.Y. Times)

3 – Summary of the Fourth International Conference of Charity Regulators Continue…

We won’t know whether a recent Tax Court case (reprinted below) was decided correctly until Jim Hasson has his next panel on UBIT, but I find the rationale used in this case confusing.

If the subject homeowners association is serving Ocean Pines, Maryland, population 10,496, is that a “community” for purposes of section 501(c)(4)? Even the IRS seems to say yes. If that’s a community, should it matter if services (day-time parking) are limited to members of that community? I don’t think so. The issue to me is whether the night-time parking is subject to UBIT, which it clearly is.

Correct me if I’m wrong, but isn’t a church or school analogy appropriate? A church or school restricts its parking to members or students during certain times. No one argues that is not a related use or subject to UBIT. But if the church or school is able to make money off its parking lot when not needed for church or school functions, that is subject to UBIT.

In the case under consideration, the court seems to get confused in its analysis, and focuses on the fact that the two parking lots at issue are eight miles away from the community of Ocean Pines. Why should this matter? The day-time parking clearly benefits the folks from Ocean Pines, but isn’t that part of the community benefit for which Ocean Pines Association received its 501(c)(4) status? The night-time parking is run like your typical commercial parking lot, so UBIT is appropriate on the receipts from this business activity.

Any other opinions?

I don’t know whether us beleaguered males should be outraged or not at an article in today’s New York Times discussing Under Armour sports apparel. According to an analyst for a market research group, “guys buy clothes to look cool or feel cool,” whereas “women buy for fit and color.” Okay, I don’t like the bozo implications, but women do have to admit we are cool.

Another Times’ article is a follow-up to an earlier Times’ story, and sort of a follow-up to my report yesterday on a Baltimore Sun article on compensation of hospital executives.

Practices of Dodgers’ Charity Are Said to Be Under Scrutiny

by Katie Thomas and Michael S. Schmidt, New York Times, August 31, 2010

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I’m assuming all readers of this missive subscribe to the IRS’ EO Update, so unless there is something controversial — heaven forbid — I don’t comment on what the IRS has to say. I will say the latest issue (2010-20) is out for anyone who has been napping or, in the case of Bill Brockner, traipsing about Scotland.

In December, 2008, my incredibly shrinking hometown newspaper, the Baltimore Sun, somehow found the resources to do a devastating (for Maryland hospitals) investigative series on hospital debt-collection practices and lack of charity care, which may have been a factor in Congress passing section 501(r). While not as extensive, the Sun has found the resources to do another report on Maryland hospitals, this one focusing on executive compensation, using Form 990 data.

Hospital CEOs Get Seven-figure Salaries, Country Club Memberships

Critics Question Whether Nonprofits Should Pay So Handsomely

By Andrea K. Walker, The Baltimore Sun, August 28, 2010 Continue…

1 – 38 Comments and More Coming? (Notice 2010-39)

2 – IRS’ Role in Overseeing Political Expenditures to Grow? (Washington Post article)

3 – Rare School Case? (Denial Letter 201033039) Continue…

Today I’m sending along excerpts of three news items I found of interest, with my comments in CAPS.

1 – Praying or preying for Terri Schiavo

Gary Snyder’s Nonprofit Imperative (gary.r.snyder@gmail.com) had this item in a recent post. Hopefully the IRS has taken note:

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