Current News and Developments

1 – Maybe “Homes Sweet Homes” will become “Home Sweet Home” Again

2 – UBIT Case Studies

3 – CBO Releases Report on Charitable Giving Tax Options

Weekend reading.

4 – Watchdog Group Seeks IRS Review of Organization’s 501(c)(4) Status

1 – More on “Bobby, Please Come Back”

2 – Current UBIT Issues Discussion

ABA Tax Section Murmurings and More

6 – COF Continues to Seek Rev. Proc. 92-94 Update

1 – Washington Invasion

3 – Bruce Hopkins’ Current Developments (Part 4)

1 – Bruce Hopkins’ Current Developments (Part 3)

2 – Chairman of House Appropriations Committee Accused of Steering Federal Money to Nonprofits in Kentucky

3 – Excerpts from Testimony Prepared for Subcommittee on Oversight and Subcommittee on Health, Committee on Ways and Means of the United States House of Representatives, April 1, 2011

Bruce Hopkins’ Current Developments (Part 2)

I have no idea how long my discussion of Bruce Hopkins’ Georgetown remarks will go on. At this point I am not even half through his remarks, but since Bruce is always so provocative, who’s counting?!

Bruce summarized a 2010 denial letter, PLR 201023058, by saying that “the organization was held to violate the private benefit doctrine because (1) it does not forbid compensation of directors and (2) related parties on its governing board might use its assets for private benefit.”

Bruce says this denial letter “troubles [him],” that “there’s nothing in the law that bars compensation of directors, as long as the compensation is reasonable, and there’s certainly nothing in the law that requires that charities put in their documents that directors will not be compensated, and the other reason was that the governing board might be engaged in acts of private benefit. That’s not the way the [private benefit] doctrine is supposed to work. It’s supposed to apply when there has been some form of private benefit rather than give the IRS the authority to sit back and speculate about what might happen and deny recognition of exemption on that basis.”

1 – Current Developments

I always enjoy listening to, and critiquing, Bruce Hopkins when he does his annual talk on “Current Developments” at the Georgetown program on “Representing & Managing Tax-Exempt Organizations.” This year was no exception, and today I will begin my review.

Bruce began by noting what he considered the “most important element of the EO workplan” — drum roll please — the Charitable Spending Initiative. In case you missed it, the CSI is, in the words of the IRS, “a study to learn more about sources and uses of funds in the charitable sector and their relationship to the accomplishment of charitable purposes.” Organizations selected for examination under this study include “those with high levels of fundraising expenses, organizations reporting unrelated trade or business activity with relatively low levels of program service expenditures, organizations with high ratios of officer compensation in comparison to program service expenditures, and organizations with low levels of program service expenditures in comparison to total revenue.”

Yesterday I attended Day One of the Georgetown program on “Representing & Managing Tax-Exempt Organizations.” TE/GE Commissioner Sarah Hall Ingram led off the conference with an excellent speech. We did hear a word — “soon” — that would be repeated by subsequent government speakers. Soon a revocation list will be posted of those organizations that failed the three-year filing requirement, and soon guidance will be published as to how those revoked organizations can get their exemption back. I suspect the IRS has in mind a streamlined procedure not requiring a full review of each application.

As I noted yesterday, today I would be going to the program on “Nonprofit Governance: Critical Risk Management Issues for Boards and CEOs,” sponsored by Georgetown CLE, Independent Sector, and the IRS.

As indicated in the title of the program, it was geared to board members and CEOs, and the attendance list indicated mostly representatives from nonprofit organizations and foundations. As a result, the program was not — and should not have been — geared to sophisticated EO tax practitioners, so I think it is fair to say that most of the tax discussion was pretty basic, so I will only give a very brief summary of the tax portion of the program.

1 – The EO Event of the Year

3 – AHA, HFMA, and VHA Critical of ‘Onerous and Redundant’ Schedule H

1 – Latest IRS EO Update (2011-7)

2 – Dean Zerbe Featured on Last Night’s CBS News Broadcast

3 – The Attorney General’s Mission & The Public’s Interest

1 – Inauguration Activities Clarification

2 – New Hospital Requirements Discussed

6 – Post-Issuance Bond Compliance

1 – Latest IRS EO Update

2 – Alaska’s Sandy Deja’s EOMF Update

3 – Chuck v. Rahm

4 – More on AARP Hearing

5 – New York Times’ Articles

6 – Interesting PLRs Released Last Week

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.

1 – Catch-up Day

2 – Update on IRS Audits of Colleges and Universities

1 – Valentine’s Day Greetings to the IRS

Lots of love coming out of Congress these days.

2 – Need for EOs in Egypt

Milt Cerny sees need to redo actions of 22 years ago.

3 – Clarification of Remarks

No whining intended.

4 – When is a Cult a Cult?

The boys go at it (again).

5 – More on the Milton Hershey School

I sincerely hope the IRS has opened an audit by now. If not, why not? And why no “60 Minutes” coverage? Instead, the venerable “60 Minutes” had a “revealing” interview of Lady Gaga last night. Welcome to 21st Century investigative journalism.

6 – Doings at Hershey School Nothing New

Fritz Mondale on the Sister Kenny Institute.

7 – Handout for EO Committee Panel on Executive Compensation and Intermediate Sanctions

I’ll have the transcript for the sixth and final panel of the January 21 meeting of the EO Committee of the ABA’s Tax Section tomorrow. The presentations tend to follow the handout, but the handout is more extensive in certain areas.

For some North Carolinians, the Super Bowl is tonight — UNC at Duke with even the New York Times taking notice. I’m sure Duke graduates Jim Hasson, Marc Owens, and Celia Roady will be glued to ESPN tonight, but I recently learned that Dick Gallagher’s daughter is at Chapel Hill and a fan. If the Tar Heels upset the Blue Devils, Dick will have two Super Bowl wins in one week! And, win or lose, maybe the Duke students can move out of their tents and even go back to class.

1 – Troubles Continue for One of the Grassley Six and New Focus on Scientology

Notably absent from Senator Grassley’s investigation of high profile churches was the Church of Scientology. Now Lawrence Wright’s 24,000 word article in the current issue of the New Yorker about the Scientologists is drawing attention (article available at www.newyorker.com). Somewhat surprising, at least to me, is that nowhere in the 24,000 words is there any mention of the church’s battles with the IRS or the eventual IRS capitulation.

One of Senator Grassley’s media ministers has also been in the news recently. In an item reprinted below, the current travails of Bishop Eddie Long are detailed. It seems to me that if the Evangelical Council for Financial Accountability’s Commission on Accountability and Policy for Religious Organizations is to be really successful, it needs to get all six media-based ministries investigated by Senator Grassley to join ECFA or otherwise show greater financial accountability. (For earlier coverage, see Email Updates 2011-4, -10, and -15.)

2 – Handouts for EO Committee Panel on Donor Fraud, Bankruptcy, Remorse or Mistake

I’ll have the transcript of the fifth panel of the January 21 meeting of the EO Committee of the ABA’s Tax Section tomorrow. Today, if you have the time and interest, look at the handouts, which are well-done and serve as the basis for the speakers’ remarks.

On Friday, the Evangelical Council for Financial Accountability (ECFA) held a briefing on Senator Grassley’s Staff Report and its implications featuring Dan Busby, ECFA President, and Michael Batts, Chair of ECFA’s Commission on Accountability and Policy for Religious Organizations. For information on the Staff Report, see Email Update 2011-4. For information on ECFA and its Commission, see the ECFA website (www.ecfa.org).

The purpose of the briefing was to address issues contained in the Grassley Staff Report that will be considered by the Commission. Each issue was introduced by Busby for comment by Batts.

1 – Ron Schultz To Leave IRS

If you loved Del Boca Vista (remember those Seinfeld episodes?), you’ll love Boca Raton, Florida, where the ABA Tax Section will be having its winter meeting. For those lucky enough to go, I have the program schedule of the EO Committee. My plan is to listen to the tapes while watching the Super Bowl, although sometimes it can get confusing. Did Lois Lerner just score a touchdown? Did Ruth Madrigal intercept a pass?

3 – Samuel P. King, Judge and Critic of Hawaiian Charity, Dies at 94

No one new to the EO area should not know of the Bishop Estate. I’ve been fascinated by it ever since the seventies when I was assigned a ruling request by the estate. When it was denied, the estate’s lawyer went straight to Russell Long, then Chairman of Senate Finance, and got a rifle shot provision overturning the negative ruling. Now that’s having clout!