Shirley Chin.


After practicing as a corporate attorney at Davis Polk & Wardwell in New York, Shirley Chin returned to San Francisco and spent several years advising nonprofits. In addition to general board advisory and corporate governance work, the technical law that governs exempt organizations is tax law, she notes, with a special focus on Internal Revenue Code Sections 501 through 515.

One particular project stood out for Chin: "I was advising GreatSchools, and it was still a relatively new organization at the time. The organization wanted to start charging a fee to provide premium service to its users. It was characterizing these fees as program service revenue. Under U.S. tax laws, in order to maintain public charity status, an organization needs to receive at least 33.3 percent of its support from the government or general public over a rolling five-year period. Public charities are constantly monitoring this public support ratio, making sure that a large grant receipt does not inadvertently blow the public support test. Program service revenue has no impact on this public support ratio."

However, Chin notes, membership fees are considered public support. "I noticed this opportunity right away and recommended that GreatSchools recharacterize the program service fee as a membership fee, and the premium services as membership services (with insubstantial value under the guidelines provided in Revenue Procedures 90-12). I also provided practical suggestions on how to change their website to support the recharacterization. This simple recharacterization improved GreatSchools' public support analysis and allowed their users to become members and also get a charitable deduction for the membership payment."

Pivotal Moment

This was a pivotal point in Chin's career, she explains: "That intersection of the broad tax concept with the details, the numbers, and how they advance a company's strategic vision is what I find most interesting about tax law. In other areas of law, you can talk grand principles and concepts. Constitutional law is especially lofty. In tax law, the devil is always in the details, and that is what makes it so fun. I was hooked, and from there, I moved to the IRS Office of Chief Counsel and spent almost a decade litigating tax cases, advising audit teams on examination of large corporate and international taxpayers, and working with the National Office to issue public guidance because of my role as an industry counsel and involvement in...

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