EO Tax Journal

1 – No Surprise Here — Supreme Court Follows My Advice

Earlier this year, I wrote that if the justices of the Supreme Court are as smart as they think they are, they will deny cert in the case of Foundation of Human Understanding. Well, yesterday they did. Actually, that’s too bad, it would have been nice to have had a definition of a “church” from the High Court. For the denied cert petition, see Email Update 2011-7.

2 – Current Issues Affecting Private Foundations

I believe readers who work with private foundations will find information presented by Victoria Bjorklund of Simpson Thacher & Bartlett LLP, New York, at the recent 47th Annual Washington Nonprofit Legal & Tax Conference, to be of interest. Continue…

Senator Grassley in the News – Part 2

On Friday, I reprinted the comments of Professor John Colombo on the comments of Senator Charles Grassley (R-Iowa). It has been suggested to me that I run Senator Grassley’s comments so that readers will know exactly what he said and in what context and then readers can be in a position to better evaluate both Senator Grassley and Professor Colombo’s comments.

Excerpt from the March 1, 2011 Hearing before the Senate Committee on Finance titled, “How Did We Get Here? Changes in the Law and Tax Environment Since the Tax Reform Act of 1986.” Continue…

1 – Report to Readers

2 – Senator Grassley in the News

3 – Current Events Continue…

1 – Compensation Update

2 – Proposed Regs Address Expanded Statutory Disclosures to State Officials
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1 – Compensation Update

The New York Times has an interesting article today, “Immune to Cuts: Lofty Salaries at Hospitals.” Here are salaries noted at New York hospitals:

• At Bronx-Lebanon Hospital, the chief executive was paid $4.8 million in 2007 and $3.6 million in 2008.

• At New York-Presbyterian Hospital System, the chief executive was paid $9.8 million in 2007 and $2.8 million in 2008.

• At Mount Sinai Medical Center, the chief executive was paid $2.7 million in 2008.

• At North Shore-Long Island Jewish Health System, an executive was paid $2.4 million in 2008

Are these salaries subject to review? According to the Times,

“Under current policies, the State Health Department monitors executive salaries, though much of the compensation data the hospitals provide to the state do not jibe with the tax forms that they must file. In any event, the state does not regulate the salaries, viewing them as decisions that are entirely up to the hospitals’ boards. ‘Basically, the state does not set compensation rates for private businesses, even if taxpayer funding is a major revenue stream,’ said Claudia Hutton, a spokeswoman for the Health Department. ‘We don’t have any authority to set compensation levels or even to advise.’ New legislation proposes to give that authority to the state.”

My comment: All these hospitals are listed in Publication 78, even though the spokeswoman for the New York Health Department calls them “private businesses.” Also, why does “the compensation data the hospitals provide to the state not jibe with the tax forms that they must file”? Are these “tax forms” the 990s?

2 – Proposed Regs Address Expanded Statutory Disclosures to State Officials

The IRS recently released proposed regulations under section 6104(c) of the Internal Revenue Code, as amended by the Pension Protection Act of 2006 (reprinted below). Section 6104(c) expands permitted disclosures to appropriate state officers, ASOs for short. I’ve reprinted section 6104(c) below for those who want to track how the proposed regs follow the statute.

The expansion of section 6104(c) disclosure should be helpful, but unfortunately its impact will be limited to those states that have dedicated charity officials. In addition to charities, section 6104(c) now covers other than section 501(c)(3) organizations, but only to the extent necessary to administer state laws regulating the solicitation or administration of charitable funds or charitable assets.

Query: Did these proposed regulations really require over four years to bring to fruition? And how many more years will it take to make them final? Continue…

Today I have the transcript of the discussion by two IRS experts on tax-exempt bonds. This completes our effort of transcribing five panels of the February 4 daylong meeting of the TE/GE area councils. Here are our prior transcripts:

“Update from the IRS” (Holly Paz) — Email Update 2011-33
“Three Year Revocation, Consequences, Reapplying for Exempt Status” (Matthew Giuliano) — Email Update 2011-36
“The 2010 Form 990” (Steve Clarke) — Email Update 2011-39
“Compliance Programs for Exempt Organizations: From Policy to Practice” (Joyce Hellums and Gerry Griffith) — Email Update 2011-44

Tax Exempt Bonds

What follows are the February 4 remarks of Victoria Tsilas and Johanna Som de Cerff, attorneys in Branch 5 of the Financial Institutions & Products Division, IRS Office of Chief Counsel, as delivered at the TE/GE Councils’ annual meeting. The moderator of the panel is Christopher Ballard of Honigman Miller Schwartz and Cohn LLP, Ann Arbor, Michigan. Continue…