Other Developments

• DOI: http://doi.org/10.1002/npc.30323
• Date: 01 May 2017
• Published date: 01 May 2017

Bruce R. Hopkins’ NONPROFIT COUNSEL

May 20178THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

Bruce R. Hopkins’ Nonprofit Counsel DOI:10.1002/npc

OTHER DEVELOPMENTS

◆The Supreme Court, on February 21, denied certiorari

in the case of True the Vote, Inc. v. Lerner, concer ning the

organization’s pursuit of a Bivens remedy in connection with

the processing of its application for recognition of exemp-

tion (summarized in the January 2017 issue). [26.1(j), 26.15]

◆The IRS issued, for comments, a draft of instructions

to accompany Form 8945. These instructions discuss

the way US multinational companies report their global

profits and taxes pursuant to the country-by-country

reporting rules (see the January 2017 issue). While there

is no general exclusion for tax-exempt organizations

from these rules, an exemption from filing is available for

exempt entities with less than $850 million in unrelated

business taxable income.

◆Elinor Ramey (see p. 1), at the conference, said that

charitable organizations involved in conservation ease-

ment transactions will generally not be caught up in

Treasury’s announcement that some of these deals are

listed transactions (see the March 2017 issue) because

they are not the requisite “parties” to the transactions.

She added that organizations that are “more involved in

setting up these agreements and setting up these part-

nerships” should be concerned. [28.18(d), (e)]

◆Operation of a fraudulent charity can follow the pro-

moter to his or her grave. In addition to revoking the tax-

exempt status of the charity, which was upheld in court

(Partners in Charity, Inc. v. Commissioner), the IRS assessed

tax shelter promotion penalties on the president of the

organization in the amount of $6.7 million. (He claimed

the down payments made by selling homeowners were

deductible charitable contributions when that was not the

case.) The US Tax Court held, on March 16, that an IRS

appeals officer did not abuse his discretion in finding that

this individual had the financial capacity to pay the gov-

ernment at least $178,956, by including a loan from this

individual to the charity in the amount of $146,881 to his

asset base, because of this individual’s control of the char-

ity (Estate of Konkus v. Commissioner). During an appeals

conference, the individual offered $50,000 in settlement.

He passed away after the Tax Court trial.

◆A federal judge ruled that Harvard University must

“provide testimony and produce documents disclosing

the bank accounts, routing numbers, wire transfers and

other interbank messages used by an alumnus . . . to

send the university money” (The New York Times, March

3). This article added that the ruling places the institu-

tion in the “uncomfortable predicament of revealing

confidential information gleaned from the donations of

an influential benefactor.”

◆Is the Federal Election Commission about to be

transformed? A Democrat on the FEC, Ann M. Ravel, is

quitting her term early, claiming gridlock on the Com-

mission. As The New York Times reported on February

20, the “outcome [resulting from this resignation] could

have a major impact on a commission long derided for

inaction, even as record amounts of money have poured

into campaigns.” President Trump may select her suc-

cessor, ignoring the tradition that would have that indi-

vidual selected by Senate Democrats, naming someone

who would pursue deregulation by the FEC. The Times

noted that Donald F. McGahn, White House counsel,

was an election commissioner and “has pushed fiercely

for deregulating campaign finance.”

◆Legislation has been introduced to require tax-exempt

organizations to disclose the identity of donors of at

least $5,000 where the entity is expending funds for

attempts to influence the selection, nomination, elec-

tion, or appointment of an individual to public office (S.

300). The title of this bill is the “Sunlight for Unaccount-

able Non-Profits (SUN) Act.”

Quote of the Month: As reported in many quarters,

the White House has proposed a cut of 14.1 percent in

funding of the IRS for the federal government’s upcom-

ing fiscal year. That would reduce the agency’s budget

to $9.65 billion, compared to $13.6 billion (adjusted for

inflation) six years ago. Here is the reaction of Lawrence

B. Gibbs, former IRS commissioner: “The confluence of

a 14 percent reduction, on top of a string of reductions

of $900 million over the last eight years, with a promise

of major tax reform later this year is a recipe for disas-

ter at the country’s most significant revenue-producing

agency” (The New York Times, March 3). ◆

Each article in the newsletter on a tax-exempt organizations law topic ends with a citation to the appropriate chapter(s) or

subchapter(s) in Hopkins, The Law of Tax-Exempt Organizations, Eleventh Edition (Wiley 2016, 2017 cumulative supplement).

This is done to provide ready access to additional and background information concerning these articles. For example, underlying

information concerning the fourth article in this issue is available in Chapters 12 §§ 4(a), (c), 24 § 4), and thus the citation is refer-

enced as [12.4(a), 12.4(c), 24.4]. Likewise, each article in the newsletter on a charitable giving law topic ends with a citation to the

appropriate chapter(s) or subchapter(s) in Hopkins, The Tax Law of Charitable Giving, Fifth Edition (Wiley 2014, 2017 cumulative

supplement). For example, underlying information concerning the second article in this issue is available in Chapter 10 § 1, and

thus the citation is referenced as [10.1].

This newsletter is a stand-alone publication. An inventory of articles in the newsletter since its inception in 1983, and a subject

matter index, as well as an index of the court opinions, IRS revenue rulings and procedures, IRS technical advice memoranda,

and IRS private letter rulings discussed in the newsletter, are available at www.nonprofitlawcenter.com. For those who have the

books, the newsletter also provides monthly updates. Both books are annually supplemented. Questions concerning nonprofit law

developments in general may be sent to brucerhopkins@brucerhopkinslaw.com. Also, a comprehensive summary of nonprofit law

is available in the Bruce R. Hopkins Nonprofit Law Library, an e-book published by Wiley. Follow BRHopkins_NPLaw on Twitter.

The newsletter has a dedicated website. Please visit www.hopkinsnonprofitcounsel.com.