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• Author: Bruce R. Hopkins
• Profession: Leading authority on the law of tax-exempt organizations
• Pages: 238-255

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labor organization

A “labor organization” is a form of tax-exempt organization under the federal tax law (IRC

§§ 501(a), 501(c)(5)). The general exempt purpose of a labor organization is the betterment of

the conditions of thos e who are employees (usually its members)inaparticulartrade or busi-

ness. Thus, a labor organization b asically is an association of workers who have combined to

protect or promotet he interestsof its members by bargaining collectively with their employer

to secure better working conditions, wages, and similar benets. Labor organizations princi-

pally are labor unions and councils; they also includ e labor temples, organizations created by

a collective bargaining agreement, and organizations that publish newspapers and magazines

in the labor eld. [EO §§ 16.1, 24.5(f); AS §1.6(c); PF §§ 1.6, 15.9; FR §5.18(b)(iv); AR §

3.1(e)(2); AU §7.1(k); UB §9.5; SM p. 41; LI Q 1.50].

last-in, rst-out method

The “last-in, rst-out method” is a method used by a business for tracking its inventory.This

method (often referred to as LIFO) assumes that the items of inventory last purchased are the

rst sold. This method has ramications for the way in which the inventoryis va lued.Sincethe

most recently purchased items of inventory are considered to be the rst items sold, the eects

of ination (rising market prices) or deation (falling market prices) are minimized. [CG §§

2.13, 9.3(f)].

last will and testament

See Will.

laundry services, for hospitals

Atax-exempt hospital can provide laundry services for itself without adverse tax law con-

sequences, inasmuch as clean laundry is integral to the promotion of health.If,however,an

exempt hospital provideslaundr y services for one or moreother organizations (tax-exempt or

not), the activity is consideredan unrelated trade or business.Anonprot organization that

has as its purposes the provision of laundry services to tax-exempt hospitals cannot qualify as

acharitable organization.An organization thatprovides laundry ser vices to exempthospitals

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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LEAD PERIOD 239

cannot qualify as a cooperative hospital service organization.[EO§§ 11.4, 24.5(b); HC §§

1.5, 17.1, 24.16].

law

The “law” on a particular subjectis a set of rules governing human conduct. When the word is

used, it most often is a reference to laws enacted by a legislature,intheformofstatutes.The

word law, however, also encompasses administrative law and law made by the courts. As to

the federal tax l aw, the law (having precedential value) cons ists of provisions of the IRC,tax

regulations,revenue r ulings,revenue procedures, and court opinions.

Thisconceptisrelevantinthenonprot organizations context, in that the term legisla-

tion is a derivative of the word “law”; there are limitationson the ability of certain tax-exempt

organizations,particularlycharitableone s, to act to inuence the development of legislation.

Thus, if an activity of a legislative bo dy does not involve the writing of legislation, the activity

presumably is not lobbying.ItistheviewoftheIRS, however, that an attempt to inuence the

conrmation, by the U.S. Senate,of a presidential nominee constitutes, for these purposes, an

attempt to inuence legi slation; this position is base d upon the denition of the term “leg isla-

tion”found in the expenditure test.[EO§22.2; SM pp. 187–188].

law, sources of

For nonprot organizations, the sources of the law are manifold. These include t he U.S.

Congress, statelegislatures,fed eral and state administrative agencies (includingthe IRS), and

court decisions. The result is a battery of statutes,regulations,rules, and court opinions. Other

items, such as revenue ruli ngs,revenue procedures, and forms and instructions to them, are

not formally law. [EO App. A].

law rms, public interest

See Public interest law rms.

lawsuit

A “lawsuit”is a proceeding initiated in a court whereone or more personsseekaremedy,recog-

nized in the law, against one or more other pers ons. (also Declaratory judgment;Defendant;

Plainti).

lawyer

A “lawyer” is an individual who is licensed to practice law in one or more states. Generally,

the role of a lawyer is to advise persons as to applicability of laws, and provide services to

them to assist them in planning in connection with,and complying with, the law. A lawyer in

private practice is an independent contractor and a lawyer that is in-house is an employee.

[SM pp. 26–27, 30; FR §2.4; CU Q 1.48, Q 1.49; RE Q 1.5–Q 1.7; LI Q 1.57, Q 5.49] (also

Attorne y;Power of attorney).

lead period

The term “lead period” is used in the context of split-interest trusts.Itistheperiodoftime

represented by the rst of the two interests (income interest or remainder interest)inthe