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• Author: Bruce R. Hopkins
• Profession: Leading authority on the law of tax-exempt organizations
• Pages: 206-232

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IRC

The term “IRC”meanstheInternal R evenue Code of 1986, as amended.

IRS

The term “IRS”meanstheIntern al Revenue Servi ce.(alsoAgency).

identication number

See Employer identication number.

illegal activity

An organization cannotqualify as a tax-exempt charitable organization or an exempt social

welfare organization (and presumably all other types of exempt organizations) under the

federal tax law if it undertakes one or more activities that are illegal under federal law.Recent

examples are the advocacy of polygamy and the distribution of marijuana for recreational or

medical use. The IRS is of the view that illegal activities,which violate the minimum standards

of acceptable conduct necessary to the preservation of an orderly society, are contrary to the

commongoodandthegeneralwelfareofthepeopleinacommunityandthusarenotpermis-

sible means of advancing the purposes and activities of exemptorganizations. [EO §6.3(i); SM

p. 324] (also Public policy doctrine).

ill person

The federal tax l aw includes special rules by which a for-prot corporation canobtainatwice-

basis deduction for a charitable contribution of property constituting its inventory .These

gifts must be used for c are of the “il l,” needy,orinfants. For this purp ose, an “ill pers on” is

aperson who requires medical care. This includes thos e suering from a physical injury, a

person with a signicant impairment of a bodily organ, a person with an existing handicap,

whether from birth or later injury, a person suering from malnutrition, a person with a dis-

ease, sickness, or infection that signicantlyimpairs physical health, a person partially or totally

incapable of self-care (including incapacity due to old age). A person suering from mental

Bruce R. Hopkins’ Nonprot Law Dictionary, First Edition. Bruce R. Hopkins.

©2015 Bruce R. Hopkins. Published 2015 by John Wiley& S ons,Inc.

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IN BEING 207

illness is included in this denition if the person is hospitalized or institutionalized for the

mental disorder, or, although the person is not hospitalized or institutionalized, if the person’s

mental illness constitutes a signicant health impairment. [CG §9.3(b)].

immediate payment charitable gift annuity

An“immediatepaymentcharitablegiftannuity”isacharit able gift annuity in which the pay-

ment of the annuity begins less than one year from the date on which the annuity was issue d.

[CG §14.1] (cf. Deferred payment charitable gift annuity).

immunity

In general, t he law provides an “immunity” where it excludes,exempts,orshieldsaperson

from a legal obligat ion. For example, some state s have enacted laws th at immunize individu -

als who serve, as volunteers,ontheboard of directors or board of trustees of a nonprot

organization fromo cers’ and directors’ legal liabilit y. [PG p.25; SM p. 7].

impulse donor

An “impulse donor” is an individual who makes a charitable contribution on a whim—

perhapsin response to a compellingsolicitationduringatelethonorinadirect mail piece; the

gift usually is of a relatively small amount of money. The gift normally is not of property and

the donor is not intending to involve himse lf or herself with the donee charitable organization

as a volunteer. [SM pp. 129–130].

imputed income

“Imputed income” is income that a person does not directly earnorreceive,butthatis

attributed or assigned (imputed), by operation of law, to that person. This concept is most

notablein the context of the federalincometaxlaw;it is based on the thoughtthat there should

not be a deduction for a particular expense if t here is no correspondi ng item of income. For

example, this is one of the policy reasons underlying the denial of a federal income tax charita-

ble contribution deduction for t he contribution of services; the individual who would claim

that deduction most likely did notregard as imputed income the value of the services provided.

Moreover, in a situation of this nature, the imputedincome and the “imputed deduction” almost

always would endin a wash.[CG§9.14].

in being

Thewords“inbeing”meanaliveatanascertainabletime;thistermisapplied,ofcourse,with

respecttoindividuals.Forexample,inthecaseofacharitable remainder trust,whereallora

portion of the income interest is to be paid to an individual or individuals, all of them must

be living at the time of t he creation of the trus t. A named person or persons may include

members of a named class, provided that,in the cas e ofa class that includes any individual, all

oftheindividualsarealiveatthetimeofthecreationofthetrust.Thisrequirementdoesnot

apply where the period for which the income interest is to be paid to the class consists solely of

aterm of years.[CG§§ 12.2(d), 12.3(d)].