Thursday, June 4, 2009
Attorney Kenneth H. Ryesky publishes "Honorary Board Membership, Real Tax Liability: Limits to Tax-Exempt Organization Honorary Board Member Immunity Under Internal Revenue Code § 6672"
Attorney Kenneth H. Ryesky published "Honorary Board Membership, Real Tax Liability: Limits to Tax-Exempt Organization Honorary Board Member Immunity Under Internal Revenue Code § 6672" in the Akron Tax Journal. Here is the introduction:
Well over half of the Internal Revenue Service's (IRS's) total revenue collections are taxes withheld from by employers from their employees' wages and salaries. To ensure actual collection by the government of the withheld taxes, the Internal Revenue Code imposes personal liability upon the individuals responsible for withholding and paying over the taxes. The withheld monies are commonly known as "trust funds." In 1996, as part of the Taxpayer Bill of Rights 2 (hereinafter referred to as "TBOR2"), Congress provided a safe harbor to protect honorary board members of charitable organizations from liability for trust funds.
Over the past few years, Congress and the Internal Revenue Service (and, for that matter, the state taxation, legislative and law enforcement authorities) have increased their scrutiny over the charities and other tax-exempt entities. 8 The resulting climate change in the charitable sector presents challenges and issues for those who actively involve themselves in charitable works.
This article will discuss the implications of the various governmental trends and initiatives upon the potential trust fund liability of tax-exempt organizations' honorary board members.