Archive for January, 2011
Today is catch-up day. Plus it’s the end of the month, time to clean off my desk. Could it be coincidental that there were no football games this past weekend? (The Pro Bowl — what one wag calls “the most pointless event in all of sports” — doesn’t count.) Tomorrow, unless we have another blast of snow, I’ll start sending out transcripts of the recent meeting of the EO Committee of the ABA’s Tax Section. I’ve already found the first two panels of interest — we even have a feisty Lois Lerner staring down the men. Stay tuned.
1 – Old Business
2 – More Old Business
3 – The Economist on Grassley and ECFA
4 – Another PACI Case?
5 – The Globalization of Philanthropy
6 – Potential Gift Tax Liability for Contributions to 501(c)(4)s
7 – IRS Denies Organization Seeking to Propagate the Genetic Integrity of Horses Continue…
1 – Endowment Study Shows 12% Return for FY 2010; Grassley’s Reaction
Senator Grassley continues to ask, are endowment payouts failing today’s students? A NACUBO-Commonfund Study of Endowments gives the latest investment returns.
2 – More on Catholic Hospitals
If religious beliefs trump standards of medical care in a hospital, should the hospital qualify as a hospital under section 501(c)(3) of the Internal Revenue Code for purposes of tax exemption? And does it qualify as a hospital under section 170(b)(1)(A)(iii) of the Code? Continue…
1 – Tidings from Boca Raton
2 – Definition Impossible: Minister
3 – The Redaction Blues
4 – Quote of the Month
I see one of my jobs as telling readers what not to read. I’d put the Asmark Institute case, released on Monday by the Tax Court, in that category. (Because I know some of you will still want to read it, I’m reprinting it below.) It’s very factual and the result is what I think most of us would expect.
What’s less than satisfying is the sketchy rationale for the court’s decision.
First, let me once again blast the IRS Office of Chief Counsel for not releasing its Tax Court briefs. Since the judge mentions the IRS’ brief in passing, it would be of value to know exactly what the IRS said in its brief. Let me repeat — there is absolutely no reason why the IRS should not be routinely releasing its briefs filed in litigation. Unless a court were to seal all records in a case, there is no bar to the IRS releasing what are public documents.
I suppose I could track down this case in Tax Court — not always immediately available — and pay the court 50 cents a page to copy the IRS brief. Why can’t the IRS simply make an extra copy of all its briefs available to the tax services? I believe the IRS charges the tax services for its PLRs, so it could do the same for its legal briefs if cost is an issue.
Second, lest I forget, the case under consideration. The Tax Court in Asmark Institute cites as precedent B.S.W. Group, Inc., v. Commissioner:
“Under the operational test * * * the critical inquiry is whether * * * [an organization's] primary purpose for engaging in its * * * activity is an exempt purpose, or whether its primary purpose is the nonexempt one of operating a commercial business producing net profits * * *.”
That appears to be the Tax Court’s rationale in a nutshell. I will just note that section 501(c)(3) does not specifically prohibit “operating a commercial business producing net profits.” While the regulations do allow commercial activities — in recognizing the possible imposition of the unrelated business income tax — business activities may not be the organization’s primary purpose. Continue…
1 – The EOTJ Mailbag
2 – CRS Report on Tax Issues Relating to Charitable Contributions and Organizations
This Congressional Research Service report provides an overview of recent changes affecting tax-exempt and charitable organizations. Experienced EO practitioners probably know of all these developments, but it’s probably worth a scan of the headnotes just to be sure. Continue…