Transcripts (ABA EO Committee)

As promised, I have a transcript of the ABA remarks of Phil Hackney, Lois Lerner, and Ruth Madrigal. I think we all owe a debt of gratitude to Ruth for adding one more thing we need to know as EO tax practitioners, FATCA. If you’re not familiar with FATCA, Ruth explains all. And can we get a promise from Lois never to mention 990-N again after October 15? Probably not. Is that the form that takes only 96 hours to complete? Or is that the Form 1023? Let’s see, I charge $500 an hour, so that’s only $48,000 for my services. Because I’m a great guy, I’ll extend my 50% discount, so that’s only $24,000. For the Free Fertility Foundation, that’ll be a bargain if they got a promise of a fixed fee.

If all of this is not exciting enough, the IRS released a draft of the Form 990 (core form) for 2010. Here are some changes I noted:

• Part IV, Question 20b is new: “If [the organization operates one or more hospitals], did the organization attach its audited financial statements to this return? Note: All Form 990 filers that operate one or more hospitals must attach audited financial statements.”

• Part V, Questions 13 and 14 are new:

“13. Section 501(c)(29) qualified nonprofit health insurance issuers
a. Is the organization licensed to issue qualified health plans in more than one state? Note: See the instructions for additional information the organization must report on Schedule O.
b. Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans.
c. Enter the amount of reserves on hand.

“14a. Did the organization receive any payments for indoor tanning services during the tax year?
b. If ‘Yes,’ has it filed a Form 720 to report these payments? If ‘No,’ provide an explanation in Schedule O.”

• Part XI, Reconciliation of Net Assets, is new.

• Part XII, Financial Statements and Reporting, which had been Part XI, has been tweaked to stress the need for explanations on Schedule O

Today we are completing our transcripts of the May 7 meeting of the EO Committee of the ABA’s Tax Section. I’m including the panelists’ handouts, which greatly add to one’s understanding of the panel’s subject matter.

Bankruptcy and Creditors’ Rights in a Charitable Context

What follows are the May 7 remarks of Douglas M. Mancino, McDermott Will & Emery, Los Angeles, and Linda Manley, Lawyers Alliance of New York, New York, as delivered to members of the EO Committee of the ABA’s Tax Section. The moderator of the panel is Professor Evelyn Brody, Chicago-Kent College of Law, Chicago. Their handouts follow the transcript.

A number of folks at the May 7 meeting of the ABA’s EO Committee probably didn’t know what John Pomeranz’ “inside EO law joke” was, but for faithful readers of these missives, I’ve been joking about the three certainties — death, taxes, and a bar quip to begin the last panel of each EO Committee meeting. The first few times it was cute, but finally I said enough, that future references would draw an EOTJraspberry. Well, I see John Pomeranz has dodged the bullet, but I’m sure the bar quip will be back in time for September’s Toronto meeting.

Actually what I suggest for future meetings is that the last panel begin with recordings of Jimmy Buffett’s “Margaritaville” and Alan Jackson’s “It’s Five O’Clock Somewhere.” And if you’re like me at these meetings with an old Sprite bottle full of gin, you’ve been happy since noon.

Here are just a few of the quips from past meetings for whoever wants to carry on the tradition and earn a groan or two:

January 22, 2010 meeting: “I know it’s very hard to be on a panel that is followed by a cash bar….” (Elaine Waterhouse Wilson)

September 25, 2009 meeting: “We are now to our last panel of the day, the only panel standing between you and the cash bar.” (Fred Gerhart)

January 9, 2009 meeting: “Our last panel of the day and the last panel standing in the way of the cash bar is now approaching.” (Mike Clark)

May 9, 2008 meeting: “… hopefully we’ll hear from you either at the mike or, if it gets too close to five, out at the bar.” (Sarah Hall Ingram)

January 18, 2008 meeting: “We’re the last panel standing between you and the cocktail hour….” (Mike Clark)
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Affiliated Organizations — Avoiding Traps for the Unwary

What follows are the May 7 remarks of Eve Borenstein, Borenstein & McVeigh Law Office, Minneapolis, Anne Spielberg, Harmon Curran Spielberg & Eisenberg, Washington, and Douglas N. Varley, Caplin & Drysdale, Washington, as delivered to members of the EO Committee of the ABA’s Tax Section. The moderator of the panel is John Pomeranz, Harmon Curran Spielberg & Eisenberg, Washington.

Today I have Part 2 of the third panel discussion of the recent ABA meeting on “The Plight of Newspapers: Can Tax-Exempt Organizations Help?” Lots of interesting reading.

Today I have Part 1 of the third panel discussion of the recent ABA meeting, along with the handouts.

The Plight of Newspapers: Can Tax-Exempt Organizations Help?

Today is the annual public meeting of the TE/GE Advisory Committee. I won’t be going because my doctor tells me I have the flu. (How anyone can get the flu in June is beyond me.) However, the report of most interest to exempt organizations, “Getting It Right: An Online Guide to Setting Executive Compensation for Charities,” should be up on the IRS website by early afternoon.

Maybe at today’s meeting Lois Lerner can tell us where we are with 990-N filings. In her ABA remarks, reprinted below, she was taking a hard but legally correct line on late filings. Eleven days later Commissioner Douglas Shulman issued what I have been referring to as his “Oh, never mind” statement, from which it appears late filers now have an indefinite period in which to make themselves right with the IRS.
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News from the IRS and Department of Treasury

What follows are the May 7 remarks of Emily Lam, attorney-advisor, Office of Tax Policy, Department of Treasury, Washington, and Lois Lerner, Director, Exempt Organizations, IRS, Washington, as delivered to members of the EO Committee of the ABA’s Tax Section. The moderator of the panel is Joe Lundy of Lundy & Flynn, Bala Cynwyd, Pennsylvania.

Today I’m sending along the current EO Headquarters roster as of March 18, 2010, which, somewhat ironically, is either already out of date or soon to be, since EO has announced setting up another technical group under Mary Jo Salins. In any event, I’m sure the EO folks are sitting by their phones just waiting for your call, so reach out and touch someone.

Well, it’s done. All the transcripts of the January 22 meeting of the EO Committee of the ABA’s Tax Section have been completed with today’s transcript on social clubs. For those suffering withdrawal pains, they’ll do it all again in May.

Update on Social Clubs and Section 501(c)(7)

I mentioned last Friday that I read obituaries. Louise McKnew died on February 23 from pneumonia at age 71. I hardly knew her. About all I knew about her was that she was a neighbor and that she was a member of the D.C. Bar. The only reason I knew she was a member of the D.C. Bar was because our Mensa mailman delivers all mail from the D.C. Bar to me, so I got Louise’s D.C. Bar mail and would give it to her.

William Wilkins, Chief Counsel of the Internal Revenue Service, was the luncheon speaker at the January 22 meeting of the EO Committee of the ABA’s Tax Section. Kudos to Bill for not making any “I hope I don’t give you indigestion” jokes. It was funny the first time I heard an IRS speaker use that line, but it’s getting old. Speaking of getting old, when will the last panel of the day no longer be introduced as “the only thing standing between you and the cash bar?”

Proposed Regulations on Supporting Organizations

What follows is a transcript of the fourth session of the January 22 meeting of the EO Committee of the ABA’s Tax Section. The moderator of the session is LaVerne Woods of Davis Wright Tremaine, Seattle.

News from the IRS and Treasury

What follows is a transcript of the first session of the January 22 meeting of the EO Committee of the ABA’s Tax Section. The moderator of the session is Jim Hasson of Sutherland, Atlanta.