Source: https://lawprofessors.typepad.com/nonprofit/
Timestamp: 2019-04-23 20:16:07+00:00

Document:
In other words, even though they are sometimes considered to be an essentially “tax-free” sector of the economy, nonprofits clearly have deep involvement on both sides of the ledger: as a tax expenditure, in the sense of forgone revenue, and as taxpayers and tax collectors, making substantial contributions to government revenues through tax collection from nonprofit employees and activities. This side of the ledger is not often examined, so this rough estimate is offered as a clarification that nonprofits are by no means tax negative (or even tax neutral). The two charts that follow capture nonprofit tax activity in 2015 across a vast array of U.S. jurisdictions—federal, state, and local—in a variety of tax transactions. The IRS reported that charities held over $3.8 trillion in assets and received $2.9 trillion in revenue during that tax year.1 These projections are my initial effort to quantify (in a necessarily gross estimate) the national value of charitable nonprofit benefits and obligations across the various taxing systems.
It's a short but interesting read.
A few weeks ago we posted about the coordinated effort against the Southern Poverty Law Center's tax exempt status led by right leaning groups -- including media groups -- and assisted most recently by a letter from Republican Senator Tom Cotton to the IRS demanding that the Service yank SPLC's tax exempt status. Now in the wake of a New Yorker Magazine article entitled "Secrecy, Self-Dealing, and Greed at the NRA," a gun control group has filed a complaint against the NRA with the IRS. The complaint does not have the support of a Senator just yet, but it gets an assist from former EO Division Director Marc Owens, who is also quoted in the New Yorker Article. Here is the gist of the complaint from "Everytown For Gun Safety:"
The NRA is a purported charity and exempt from federal tax under section 501(c)(4) of the Internal Revenue Code and we write today to alert you to what we believe are activities that clearly fall outside of the NRA’s charitable purpose and mission. After reviewing the facts contained in the NRA Expose, Marc Owens, who for ten years headed the IRS division overseeing tax-exempt enterprises, said, “[t]he litany of red flags is just extraordinary … The materials reflect one of the broadest arrays of likely transgressions that I’ve ever seen. There is a tremendous range of what appears to be the misuse of assets for the benefit of certain venders and people in control. ... Those facts, if confirmed, could lead to the revocation of the NRA’s tax-exempt status.” Accordingly, and for the reasons set forth below, we call on the IRS to commence an investigation into whether (i) the NRA has violated the federal laws governing 501(c)(4) charitable organizations, and (ii) if so, consider what remedies are warranted, including potential revocation of the NRA’s 501(c)(4) status.
The complaint -- which is in the form of a letter accompanying a Form 13909 (Tax-Exempt Organization Complaint (Referral) -- lists ten examples, variously and without using the legal terms, of private benefit, private inurement, excess benefit and commerciality problems. Its hard to see how this complaint will go anywhere given that the Service has effectively been prohibited from investigating 501(c)(4) groups anymore.
In the past decade, people, companies and unions have dispensed more than $1 billion in dark money, according to the Center for Responsive Politics.
Since 2015, thousands of complaints have streamed in — from citizens, public interest groups, IRS agents, government officials and more — that C4s are abusing the rules. But the agency has not stripped a single organization of its tax-exempt status for breaking spending rules during that period.
Hearings on the [the IRS examination of (c)(4) applications] continued intermittently for four years. The IRS ultimately spent 98,000 hours in staff time responding to the congressional investigations, according to testimony by the agency’s former commissioner, John Koskinen.
Ultimately, Congress disagreed. In December 2015, 17 lines were inserted into an 888-page appropriations bill: “None of the funds made available in this or any other Act may be used ... to issue, revise, or finalize any regulation, revenue ruling, or other guidance … to determine whether an organization is operated exclusively for the promotion of social welfare.” Since 2015, the lines have been carried over in each new appropriations bill. They remain in effect today.
Did you catch that last bullet point? The agency legally responsible for administering 501(c)(4), among other duties, is not allowed to spend any money . . . administering 501(c)(4)! Brilliant.
Yesterday, I talked about the Service's assertion that Panera Bread Foundation, Inc.'s tax exempt status should be revoked because the Foundation violates the commerciality doctrine. The second basis for revocation, according to the Service is that Panera Bread Foundation violates the private benefit doctrine. I probably overstated the case by asserting that the Service has the private benefit doctine "hopelessly wrong." Its wrong on commerciality but there is a legitimate private benefit concern, even if the revocation letter cited no authorities and didn't bother to better explain the fundamental concern.
Private benefit is one of those doctrines that is sometimes easily recognized but always difficult to define. In other contexts, I have written that private benefit exists when an exempt organization's invariable secondary benefits are reserved for a small group of non-charitable beneficiaries. John Colombo has written on the topic. I think he harbors a certain disdain for the theory but in an effort to make sense out of the doctrine he asserts that when a tax exempt entity wastes -- or "fails to conserve" -- its assets (usually by paying too much or receiving too little in contracts with non-charitable vendors), private benefit exists and tax exemption is not appropriate. I might be over-simplifying his thesis so I recommend you read his article. Anyway, it is axiomatic that private benefit is always necessary to achieve public benefit. Hospitals have to hire and pay doctors, Universities graduate students. Charities exist in capital markets and they have to pay market price to profit seekers to get goods and services to charitable beneficiaries. Even a soup kitchen has to pay rent and bills. There is an invariable "secondary benefit" -- the phrase used in American Campaign Academy -- but when that secondary benefit is reserved or intentionally directed towards a specific non-charitable person or entity, it might be that the tax exemption is being used to fund that specific person's profit. In those cases, it might also be safe to assume that the tax exempt entity's real purpose is therefore private benefit.
Kristine Hurd and James Gould are the sole owners of KJ's Place, a lounge where alcoholic beverages are served. The term KJ is obviously derived from the first initials of the first names of the owners, Kristine and James. In 1992, Kristine and James created petitioner, KJ's Fund Raisers, Inc. They had petitioner incorporated as a Vermont Non-Profit Corporation on October 12, 1992. They also had petitioner file a Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code on November 11, 1992. Petitioner's business is selling Lucky 7 or other break-open (or lottery or rip) tickets. The lottery tickets are sold exclusively at KJ's Place; no other locations were considered. The tickets are sold during regular business hours by the owners and employees of KJ's Place. Petitioner was organized purportedly to "raise funds for distribution to charitable causes". Petitioner expects the majority of its funds to come from the sale of lottery tickets and does not plan to solicit public donations, but will accept any donations offered. There is no evidence in the record that any such donations were ever offered or received. When petitioner was organized, Hurd and Gould were both officers and directors. She was president; he was vice president, secretary, and treasurer. The third member of the board of directors was Karen Gould, a relative of James Gould. In April 1993, petitioner replaced its board of directors. Of the three new members, two were related to Hurd or Gould. The board has been altered since then. The current board has two members unrelated to Hurd or Gould; the third is Kristine Hurd's sister. In a letter to the IRS, petitioner indicated that it would further revise its board so that none of the members were related to the officers of KJ's Place. However, that change has never been implemented. In 1993, petitioner paid Hurd and Gould compensation of $6,000 each for bookkeeping, accounting and managerial services. Petitioner also paid $6,000 in rent to KJ's Place. The measure of compensation was determined by Hurd and Gould. On July 1, 1994, changes in Vermont's gambling laws took effect. In accordance with these changes, petitioner stopped paying rent to KJ's Place and stopped paying wages to Hurd and Gould. Currently, there are no business dealings between petitioner's directors and the owners of KJ's Place, and petitioner's books are kept separate from the accounts of KJ's Place.
Before July 1, 1994, Hurd and Gould received wages and KJ's Place received rent from petitioner. Although those practices ceased and are not in issue here, the current board of directors is composed of at least the majority of the same members who allowed those amounts to be paid. This strongly suggests that Hurd and Gould are free to set policy for their own benefit without objection from the board. Nothing in the record since July 1, 1994, indicates otherwise. Petitioner also contends that KJ's Place actually lost money, since patrons preferred to buy lottery tickets rather than use their money to purchase beverages. Thus, petitioner argues, there was no actual benefit. While all facts must be accepted as true for purposes of a declaratory judgment, Rule 217, conjectural statements such as the one above are entitled to no such consideration. Petitioner has presented no evidence that KJ's Place lost money. More important, KJ's Place has benefitted from the publicity surrounding donations given by petitioner. In four of six newspaper articles or picture captions in evidence, KJ's Place is pictured or mentioned, along with Hurd or Gould, who are identified as the owners of KJ's Place rather than officers of petitioner. Petitioner argues that the clippings are not paid advertising and do not indicate the receipt of an actual benefit by KJ's Place. We find, however, that the publicity, which KJ's Place would not have received but for petitioner's exclusive association with the lounge, is a significant benefit. Moreover, the record discloses that there were other "clubs" or lounges in the area where comparable gambling took place. It is thus a fair inference that one of the real purposes of establishing petitioner in the first place was to induce customers with a proclivity for this type of gambling not to desert KJ's Place in favor of other clubs or lounges. As a result of petitioner's formation, KJ's Place, far from losing revenue, may indeed have prevented at least a portion of its business from being taken elsewhere. Petitioner engaged in the exempt activity of raising money for charitable purposes. Petitioner also operated for the substantial private benefit of KJ's Place and its owners.
There are other cases that exemplify how an exempt organization can operate so closely with its for-profit "parent" that the organization's inevitable secondary benefit flows almost exclusively to the parent and therefore the determination that its real purpose is private benefit is not an unreasonable conclusion. Est of Hawaii v. Commissioner is a good example but I won't prolong this post with a long discussion. But having identified the principle, we can see the problem that Panera Foundation faces. First, the facilities from which it operated look almost exactly like the Panera Bread stores we are all familiar with. So Panera Foundation invariably generates good will for Panera Bread. The menu items for Panera consisted of select items available from Panera Bread (at least according to the menu in the record). Most of Panera Cares employees were also Panera Bread employees, though Panera Foundation listed as one of its purposes the employment and training of at-risk or disadvantaged young people. In addition, Panera Cares' board was comprised entirely of Panera Bread folks. This might be an indication that Panera Cares might not be so inclined to act in ways that do not benefit Panera Bread directly (rather than by association with a good cause). Thus, there was some private benefit accruing to Panera Bread from Panera Cares' pursuit of an indisputable public good (feeding poor people).
Still, this case seems more like "no good deed unpunished." It just doesn't feel like KJ's Fund Raiser or Est of Hawaii. Suppose, for example, that instead of a separate look alike facility, Panera Bread prepared menu items for delivery to tax exempt soup kitchens. Presumably it could take a charitable contribution deduction even if it touted its good deeds far and wide. Or suppose Panera Bread donated its menu items -- complete with packaging that said "courtesy of Panera Bread" -- to soup kitchens. It could take a charitable contribution deduction in that case as well. But in the spirit of social entrepreneurship, it sets up Panera Cares and does the same thing except directly rather than through a separate exempt organization. Yes, the goodwill and brand impact is higher in the latter instance, but as long as Panera Cares is really "charitable" (I think I made the case yesterday that it is and unlike KJ's Fund Raiser and Est of Hawaii, Panera Cares lost money, indicating a donative intent), why should it be denied tax exempt status simply because of the more obvious goodwill value generated by its explicit relationship to the for profit "parent" and in the absence of any indication that the for-profit parent is financially exploiting the exempt organization.
I suppose a prophylactic rule is easier to administer and this case certainly might be easier, as Russ Willis pointed out to me yesterday, if Panera Cares' logo and facilities did not look almost exactly like Panera Bread's logo and facilities. But private benefit is necessary to public good; somebody has to get paid if everybody is going to get paid! In the end, I think this case ought to be decided from a policy standpoint rather than from a strict application of the prophylactic rule. Do we want to categorically preclude profit making restaurants from doing what Panera Bread is doing simply because Panera Bread is getting some good press from what seems like an honest effort at charity (which is more than can be said about KJ's Fund Raisers or Est of Hawaii). Or is the goodwill accruing exclusively to Panera Bread so intolerable that we will only provide exemption when a soup kitchen has no explicit connection to a for-profit sponsor?
Many thanks to Russ Willis and his Jack Straw Fortnightly* Newsletter for passing along the Petition for Declaratory Judgment filed in Panera Bread Foundation v. Commissioner (Docket No. 5198-19). I really had to shake my head after reading the letter revoking Panera Bread Foundation's tax exempt status. This is part 1 of my rant, dealing with the Commerciality doctrine. Part 2, tomorrow will take up the private benefit argument.
Panera Bread -- everybody knows Panera Bread -- set up a nonprofit to help fight "food insecurity" (also known as "hunger in America"). They opened fancy looking soup kitchens in apparently well kept business settings in five different cities (Chicago, Boston, Portland, Dearborn, and Clayton Missouri). They called the places "Panera Cares" and as the picture below indicates, Panera Cares look a lot like the Panera Bread restaurants. The charitable catch, though, is that payment is entirely optional; not just "pay what you can" but "pay whatever you want." People can come in and order the apparently similar quality food as is available from Panera Bread. Payment is completely optional, just like in a soup kitchen. I make a decent living but there is a soup kitchen near downtown Orlando [where my law school is] and if I want to eat lunch there free instead paying for lunch at my favorite fast food joint I can do so, no questions asked. I can leave a donation if I want or I can eat and leave. Anyway, at Panera Cares there were (the last Panera Care left closed two months ago for a variety of reasons discussed below) signs over the menu that list "suggested donations" for each item. In 2012 60 percent of the patrons gave more than the suggested donation, 20 percent paid the suggested donation, and 20 percent paid less. The revocation letter states that the 60 percent who paid more than the suggested donation -- the service considers the suggested donation as the actual value of the meal -- "are not [emphasis in the original] informed" of the deductible amount, nevermind that a written acknowledgment is required only for donations of $250 or more.
You are not operated for charitable or other exempt purposes, as required by section 501(c)(3). Your primary activity was operating community cafes located in former for-profit restaurant locations, and where most individuals had the financial means to pay for the retail cost or greater of the items provided. Providing food and drink to the members of the general public absent a showing of need is not a charitable purpose under section 501(c)(3). In addition, operating a restaurant open to the general public during commercial business hours and accepting retail cost or greater in payments from individuals receiving the food items indicates a substantial non-exempt commercial purpose. Also, this activity was funded primarily through support by a related for-profit entity and through the operation of cafes similar in appearance and operation to the related for-profit, rather than through donations or other support indicating community oversight from the general public, further showing that the operations of the cafes were for substantial non-exempt private rather than public purposes.
There is a lot to unpack but the reasons seem to boil down to the following: (1) Panera Cares feeds anybody without regard to ability to pay, a fact which necessarily means that some people who have the ability to pay will not be turned away, (2) Panera Cares will accept voluntary payments -- i.e. donations -- from anybody willing though not required to pay for the food, (3) Panera Bread, a for profit, controls Panera Cares and is Panera Care's primary source of funds besides the voluntary payments (4) Panera Cares facilities look an awful lot like Panera Bread facilities and indeed the menus are similar. In its extended analysis (Form 886-A), (you can download the entire file including the unredacted letter ruling and the Form 886-A here: Download Panera petition) the Service also thought it important that the the Panera Cares' cafes were located in affluent locations, presumably out of the way of the poor people who would most benefit from the free food. Funny thing, I don't ever remember seeing an exempt Museum of Art in "the hood" but maybe that's just me. But what bothers me most about the analysis is that it seems to be a conclusion in search of precedent. Here are the cases and rulings cited in support of the conclusion that Panera Cares violates the "commerciality doctrine."
Revenue Ruling 72-369 which involved a managerial consulting firm that served only charitable organizations for a fee, admittedly set at cost, but a required fee nevertheless.
BSW Group v. Commissioner which involved an consulting organization that provided services to other nonprofits "in the area of rural-related policy and program development" for a required fee.
Airlie Foundation v. Internal Revenue Service which involved an owner of a conference center rented out to exempt and non-exempt organizations for a fee.
Amerian Instittue for Economic Research v. U.S. involving a publishing company that sold subscriptions to educational periodicals as well as consulting services.
United States v. American Bar Endowment involving the ABA's sale of insurance to ABA members.
Customer complaints were another unexpected issue. Former Panera Cares employee Sharon Davis told Planet Money that a customer once complained about the homeless customers who frequented the location. “She comes up and goes, ‘Oh my god, these people stink. I can’t stand eating like this,’” she said, “And I said, ‘Well, I’m really sorry, but they are entitled to a meal.’” Panera employees similarly found themselves dealing with issues they weren’t qualified to handle, like mental health issues and drug use in the cafe’s bathrooms, according to the Planet Money interview. Davis, the former Panera Cares employee, told Planet Money that she and her coworkers often served as de facto social workers as well and would refer customers to shelters and rehabilitation centers.
Try going to the Olive Garden smelling like you slept in a dumpster or arguing with someone nobody else sees and see if you get seated. Yet Panera Cares catered to folks just like that and even defended the need to do so. And heaven forbid a mentally ill person is allowed to sit down and eat like a normal person for a few minutes. That's not charity simply because they might be seated next to a clean smelling sane person? Does any of this sound like sound business practices that comprise a "commercial hue"? Just which other eatery was Panera Cares competing with?
It seems the Service is just not pleased that Panera Cares stores were located in "affluent" downtown areas (an assertion that Panera Foundation disputes, by the way), rather than in the hood and that the stores were not unattractive to regular folk the way a traditional soup kitchen might be unattractive to people who can afford to buy their own food (because of the presence of those pesky smelly people who might also ask for "spare change"). Still, the biggest fact remains that the food was "free" and the people who paid were necessarily making a donation. Whether the receipt of something in return denies or reduces their charitable contribution deduction is wholly besides the point. It might be a good policy that tax exemption be reserved only for organizations that exclusively serve the poor, but that is just not the law. Sheeesh!
The Service didn't cite any cases supporting its finding that Panera Cares violates the private benefit doctrine but that seems a much closer question. See, e.g., KJ's Fund Raisers, Inc. v. Commissioner, Western Catholic Church v. Commissioner, and est of Hawaii v. Commissioner. I'll talk about those cases and how they might give Panera Cares some problems tomorrow.
Is the charitable sky falling? Maybe we should remember that there are at least 1.5 million charities recognized by the IRS and only a relatively few are engaged in scandalous behavior.
To the extent provided in regulations prescribed by the Secretary, the term “excess benefit transaction” includes any transaction in which the amount of any economic benefit provided to or for the use of a disqualified person is determined in whole or in part by the revenues of 1 or more activities of the organization but only if such transaction results in inurement not permitted under paragraph (3) or (4) of section 501(c), as the case may be. In the case of any such transaction, the excess benefit shall be the amount of the inurement not so permitted.
So let's just make sure we understand this. Attracting the best and brightest to altruistic endeavors but incentivizing them to do good work with a share of the charity's "monetary upside" is that what you are saying? Yes? Ok so owners of start-up equity in companies like Uber, WeWrok and Casper with market value upwards of $50 million have pledged up to 1 percent of their equity to Charity: Water as charitable contributions. When those companies go public, the charity cashes in (big time, no doubt) on the one percent pledge of equity and distributes up to 20% of the [ahem] "monetary upside" to the employees, including the CEO no doubt.
Yeeaaaaaaa -- No! If that ain't private inurement, per se there is no such thing.
[u]nrelated business taxable income of an organization shall be increased by any amount for which a deduction is not allowable under this chapter by reason of section 274 and which is paid or incurred by such organization for any qualified transportation fringe (as defined in section 132(f)), any parking facility used in connection with qualified parking (as defined in section 132(f)(5)(C)), or any on-premises athletic facility (as defined in section 132(j)(4)(B)).
It is probably just me, but I’m not about to get the vapors over the fact that an institution that is large enough to own offer parking benefits has to get an accountant. I’m also somewhat nonplussed about the realization that churches are in fact, charities, and are subject to … rules. Be that as it may, the expansive scope of Section 512(a)(7) does seem harsh, as the rule disallows the costs of the parking facility itself, not just the fair market value of the benefit provided to the employee. IRS Notice 2018-89 sets out some guidance on the matter, but it does get rather complicated for those entities that own and operate parking facilities, rather than simply provide a parking allowance to their employees. I do suspect that many institutions will simply opt to treat their employee parking as compensation, and thereby bypass the UBIT issue.
According to the same article, at least three bills are pending to repeal the UBIT tax on parking and there appears to be bipartisan support, so it may be that this blows over sooner than it takes to find street parking in downtown Manhattan.
Well, March Madness has come and gone. The intoxicating aura of victory is no doubt still wafting -- like cannibis in the hallways of many a college dormitory -- over the UVA campus. And the annual protestations regarding the NCAA's tax exempt status will fade again until the College football season returns. According to In Re: National Collegiate Athletic Association Athletic Grant-In-Aid Cap Antitrust Litigation, a case handed down last month in which a district court judge all but concluded that there is nothing "amatuer" about D-1 basketball and football, the NCAA rakes in $1,000,000,000 (that's one billion dollars) every year. Coaches are paid handsomely, Nike, Adidas, Coke and Pepsi make gazillions from their "sponsorship" and exclusive pouring agreements, but the athletes get nothing other than preferential admission and the cost of attendance. Granted, admission -- which might otherwise be completely out of the question for some (but not all) the athletes -- is apparently worth a whole lot of money judging by the Varsity Blues scandal. But that is not how markets work. The people exploiting another's skilled or unskilled labor don't get to unilaterally decide that the laborer is paid enough and shall receive no more. That's more like slavery than capitalism. No, markets work by arm's length bargaining where each party -- especially the party in possession of rare skill -- is entitled to demand as much as the law of supply and demand will tolerate.
"To amend the Internal Revenue Code of 1986 to prohibit qualified amateur sports organizations from prohibiting or substantially restricting the use of an athletes name, image, or likeness, and for other purposes.
(b) Effective Date.—The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act."
So the bill would make the NCAA allow student athletes to get paid when EASports and Madden Football use a student athlete's likeness. Seems like a drop in the bucket as far as the athletes are concerned. The bill was filed only about a week after the NCAA's latest antitrust loss in court so somebody on Representative Walker's staff must be a tax or antitrust geek. Or maybe he is none to happy that Carolina didn't make it to the final four after beating the Zion-less Blue Devils two times during the regular season. I have no idea whether this bill will pass or not. But even if it does, the bill does not really address the real issue regarding whether the subsidy of tax exemption is something without which the supply of college athletics would dry up. When the Intercollegiate Athletic Association (the IAA) -- the predecessor to the NCAA -- first organized in 1905, there was no doubt an insufficient market to sustain college athletes. And yet athletic competition is an undeniable "public good" to be efficiently subsidized if it were not to occur in the absence of public subsidy. Clearly times have changed. The rest of us are willingly and in absurd amounts paying handsomely to watch D-1 football and basketball. You ever try to get a ticket to a Final Four basketball or a College Football national championship game? And what's the going rate for a minute of advertising time during one of broadcasts on even the least watched channel? In any event, if the bill made it to law, the NCAA would be crazy to give up tax exempt status on an annual one billion dollars in revenue just to prevent a small percentage of their D-1 athletes from demanding market rates for their services (or in this case, the exploitation of their name, image, or likeness, the value of which derives from their rare skill). It is certain the cartel would not think paying students for the use of their NIL is such a bad idea. So the bill might resolve the exploitation issue insofar as intellectual property rights are concerned but it would make no repair to the tattered holes in the socio-economic theory that justifies tax exemption. The NCAA's tax exempt status, particularly during March Madness and the College Football bowl season, is a semi-annual reminder that tax exempt status is unmoored from any real logic or theory.
David A. Brennen, dean of the College of Law at the University of Kentucky, has been selected to participate in the American Council on Education's (ACE) Fellows Program, the longest running leadership development program in the United States. Brennen is one of 39 emerging college and university leaders chosen for the 2019-20 class of ACE Fellows. Brennen joined the UK faculty in 2009. Along with more than 20 years of experience in the classroom, he is regarded as an innovator in the field of nonprofit law as it relates to taxation. Brennen is a co-founder and co-editor of Nonprofit Law Prof Blog, founding editor of Nonprofit and Philanthropy Law Abstracts, co-founder of the Association of American Law Schools Section on Nonprofit and Philanthropy Law and a co-author of one of the first law school casebooks on taxation of nonprofit organizations.
In 1988, ​Brennen received his bachelor’s degree in finance from Florida Atlantic University and received his law degree from the University of Florida College of Law in 1991. In 2002, he was elected to the American Law Institute where he is an adviser on its project titled, “Principles of the Law of Nonprofit Organizations.” Brennen has also served in leadership roles with the Society of American Law Teachers and the American Bar Association’s Section of Legal Education.
For more information on the ACE Fellows Program, please click here.
DOJ Settles False Claims (and Private Benefit) Suit Against Big Pharma's Use of Charities to Disguise Illegal Medicare and ChampVA copays.
“The SPLC defames other organizations in several ways. Each year, the SPLC publishes a so-called “hate map,” which ostensibly identifies hate groups such as the Ku Klux Klan and the Nation of Islam. But under the guise of its “hate map,” the SPLC also lists its mainstream political opponents and faith-based groups, including reputable organizations such as the Family Research Council, the Alliance Defending Freedom, and the Center for Immigration Studies. The SPLC also defames individuals. It labeled the civil-rights activist Ayaan Hirsi Ali and the British political activist Maajid Nawaz as “anti-Muslim extremists.” Last June, the SPLC agreed to pay Nawaz – who is himself Muslim -- $3.375 million following a defamation lawsuit.
Senator Cotton’s letter goes on to accuse SPLC of allowing private inurement and “inexplicably” parking assets in offshore accounts.
For longstanding guidance on tax exempt law firms, see Revenue Procedure 92-59.
What happens when Donors harass staff? Nonprofit Quarterly discusses.
The US House Ways and Means Committee held a hearing last week on the 2017 tax law. Alliance for Charitable Reform reports on the conversation about nonprofits.
Gene Takagi summarizes California Charities and Crowdfunding Bill – AB 1539.
Georgia lawmakers vote to ease restrictions protecting nonprofit hospitals.

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