Friday, May 29, 2009

IRS Names 10 New Members to ACT Advisory Panel; ACT to Submit Recommendations at June Meeting

IR-2009-53, May 22, 2009

WASHINGTON — The Internal Revenue Service’s Advisory Committee on Tax Exempt and Government Entities (ACT) will hold a public meeting on June 10, when the panel will submit its latest round of recommendations to senior IRS executives.

Ten newly named members of the panel (listed below) will also be introduced at the public meeting. They will begin two-year terms and join 11 returning members.

ACT includes external stakeholders and representatives who deal with employee retirement plans, tax-exempt organizations, tax-exempt bonds and federal, state, local and Indian tribal governments. ACT members are appointed by the Secretary of the Treasury and generally serve two-year terms. They advise the IRS on operational policies and procedures.

At the public meeting, four ACT project teams will present the following four reports that include recommendations:

  • Exempt Organizations: Recommendations to Improve the Tax Rules Governing International Grant Making.
  • International Pension Issues in a Global Economy: A Survey and Assessment of the IRS’ Role in Breaking Down Barriers
  • Record Retention Requirements for Tax-Exempt Bonds and Tax Credit Bonds: A Specific Proposal for Published Guidance
  • Federal-State-Local Government Compliance Verification Checklist for Public Employers

ACT was established in 2001 under the Federal Advisory Committee Act to provide an organized public forum for discussion of relevant issues affecting the tax exempt and government entities communities.

ACT’s public meeting will begin at 10 a.m. ET on June 10, 2009 at the IRS headquarters at 1111 Constitution Ave., N.W., Washington, D.C. ACT reports are available on

Due to limited seating and security requirements, members of the public interested in attending the public meeting should call Cynthia PhillipsGrady to confirm their attendance. She can be reached at 202-283-9954 (not a toll-free call). Attendees must have photo identification and are encouraged to arrive at least 30 minutes before the session begins.

The 10 new members are listed below grouped by their relevant project team:
Employee Plans

Barbara A. Clark, University of California, Oakland

Clark is the benefits counsel for the retirement and health and welfare plans sponsored by the University of California, a state government agency and 501(c)(3) organization. The University provides a defined benefit pension plan and three defined contributions plans for its 124,000 employees and 41,000 retirees. Before joining the University in 2003, Clark had more than 20 years experience as an employee benefits attorney in the private sector. She received her Juris Doctorate from the Boalt Hall School of Law and is a member of the California State Bar.

Kathryn J. Kennedy, John Marshall Law School, Chicago

Kennedy is the Associate Dean for Advanced Studies and Professor of Law at the John Marshall Law School. As the Director for the Center for Tax Law & Employee Benefits at the school, she established the first LLM program in the nation for employee benefits and has since developed the curriculum for more than 20 employee benefits courses. Kennedy served for three years on the Department of Labor’s ERISA Advisory Council and co-authored an employee benefits law textbook. She received her Juris Doctorate from the Northwestern University School of Law.

Exempt Organizations

J. Daniel Gary, General Council on Finance and Administration, United Methodist Church, Nashville

Gary is Administrative Counsel for the General Council on Finance and Administration (GCFA) of The United Methodist Church, the third largest religious denomination in the United States, with approximately 8 million members and 35,000 local churches and affiliated entities. GCFA is responsible for protecting the legal interests of the denomination, and Gary provides guidance on a wide variety of issues related to tax-exempt organizations, including charitable giving, legislative and political campaign activities, and unrelated business income tax (UBIT). Gary received his Juris Doctorate from the Washington and Lee University School of Law and his Ph.D. in mathematics from the University of Illinois.

James P. Joseph, Arnold & Porter LLP, Washington, DC

Joseph is a partner and the head of the tax-exempt organizations practice at Arnold & Porter LLP. In the 10 years he has focused on representing tax-exempt organizations, he has advised public charities, colleges and universities, private foundations and advocacy groups on a variety of issues, including operating business ventures, conducting international activities and grant making, lobbying and advocacy, nonprofit governance, and executive compensation. His practice has involved several high-profile matters that have had broad impact on the nonprofit sector.  Joseph received his Juris Doctorate from the Georgetown University Law Center and is currently Chair of the American Bar Association Subcommittee on Intermediate Sanctions.
Government Entities:  Indian Tribal Governments

Bobette (Bobby Jo) Kramer, Alaska Manufacturing Extension Partnership, Inc., Anchorage

Kramer is the Operations Manager for the Alaska Manufacturing Extension Partnership, Inc., and serves as AMEP’s liaison to rural Alaska and the Alaska Department of Commerce.  She has more than 25 years’ experience in business development and long-term enterprise planning, and has extensive hands-on knowledge of rural community development strategies.  She was president and CEO of her Alaska Native Claims Settlement Act village corporation and is a member of the Native Village of Pilot Point. Kramer is pursuing a Bachelor’s degree in rural development at the College of Rural Alaska.

Wendy S. Pearson, of Counsel, Bennett, Bigelow, & Leedom, P.S., Seattle

Pearson has more than 20 years’ experience as a former IRS attorney and a taxpayer representative and has handled numerous Indian tribal government matters, including constructive receipt, taxation of member benefit programs, and withholding and information reporting.  She also regularly consults with nonprofit entities, hospitals and health care organizations on matters like governance, excess benefit transactions, executive compensation and other compliance issues.  In her practice she regularly consults with tribes and their representatives on tax issues.  Pearson received her LLM in Taxation from the University of Florida School of Law and her Juris Doctorate from the Gonzaga School of Law in Spokane, Wash.

Government Entities: Federal, State and Local Governments

Paul Carlson, State of Nebraska, Lincoln
Carlson has been the Nebraska State Accounting Administrator since 2000, responsible for comptrollership functions for the State, including accounting systems for State agencies, State financial statements, accounting processes, procedures and payments, debt financing, and cash-flow analysis of the State’s general fund.  He has been active in the National Association of State Comptrollers, recently serving as its president. Carlson is a Certified Public Accountant and the Nebraska State Social Security Administrator.  He has completed the coursework for a Ph.D. in Educational Administration at the University of Nebraska, and holds a Masters of Business Administration from the University of Montana.

Patricia A. Phillips, City of Virginia Beach, Virginia Beach
Phillips is Director of Finance for the City of Virginia Beach, where she oversees accounting, payroll, purchasing, risk management, and debt administration for the city.  She has served on the Government Financial Officers Association (GFOA) Standing Committee on Debt Management, the GFOA Standing Committee on Economic Development and Capital Planning, as well as the GFOA Executive Board.  Phillips is a Certified Public Accountant and a Certified Government Financial Manager, and she holds a Masters in Business Administration from Old Dominion University.

Government Entities: Tax Exempt Bonds

David Cholst, Chapman and Cutler LLP, Chicago
Cholst is a partner in the tax department of Chapman and Cutler LLP, where he provides tax advice relating to tax-exempt bonds, Build America Bonds and tax credit bonds.  He represents governmental issuers, underwriters, investment brokers, and attorneys in all matters relating to tax-exempt bonds, including arbitrage rebate. Cholst is in charge of his firm’s rebate computation service. Cholst has been a member of the faculty of the National Association of Bond Lawyers Tax Seminar and is a member of the ABA Tax Exempt Finance Committee.  He received his Juris Doctorate from the University of Chicago Law School.

George T. Magnatta, Saul Ewing LLP, Philadelphia

Magnatta is the chair of Saul Ewing LLP’s public financing department and an experienced practitioner in the tax aspects of public finance. His practice focuses on serving as bond counsel, underwriters’ counsel, borrowers’ counsel and tax counsel for states, cities, economic development authorities, housing authorities and nonprofit entities. Magnatta served as Assistant Branch Chief of the Office of Chief Counsel, Legislation and Regulations Division of the IRS (1981-85).  He is the co-author of ABCs of Industrial Development Bonds (5th Ed.) and is a frequent panelist at meetings of the National Association of Bond Lawyers.  He received his Juris Doctorate from Temple University and an LLM in Taxation from the Georgetown University Law Center.


May 29, 2009 in Federal – Executive | Permalink | Comments (0) | TrackBack (0)

Inazu (recent Ph.D.) Publishes "Making Sense of Schaumberg: Seeking Coherence in First Amendement Charitable Solicitation Law"

John D. Inazu (Duke, recent PhD) recently published "Making Sense of Schaumberg: Seeking Coherence in First Amendment Charitable Solicitation Law," 92 Marquette L.R. 551 (2009).  The article is available on the Marquette University Law Review webpage.  Here is the introduction:

    The Supreme Court shaped its approach to charitable solicitation in a trilogy of cases in the 1980s: Village of Schaumburg v. Citizens for a Better Environment, Secretary of State of Maryland v. Joseph H. Munson Co., and Riley v. National Federation of the Blind of North Carolina. Owing largely to ambiguity surrounding the concepts of content analysis, tiered scrutiny, and commercial speech emerging during that era, the Court failed to articulate a coherent framework for evaluating regulations of charitable solicitation. The result has left lower courts unable to judge “the ends which the several rules seek to accomplish, the reasons why those ends are desired, what is given up to gain them, and whether they are worth the price.” The Eighth and Tenth Circuits interpret Schaumburg as an intermediate scrutiny test, the Third and Eleventh Circuits view it as a strict scrutiny test, and the Fourth Circuit has simply noted that the Court has been “unclear” about the appropriate standard. The lack of doctrinal coherence has also left an important form of speech without adequate First Amendment protections.

    My objective in this Article is to articulate a framework for reviewing charitable solicitation regulation that better accounts for the important democratic values of this kind of speech. This requires understanding the relationship between charitable solicitation and related First Amendment concepts. I begin by reviewing the state of three of these concepts—content analysis, tiered scrutiny, and commercial speech—when the Court decided Schaumburg in 1980. In Part III, I review the Court’s charitable solicitation decisions. Part IV proposes an alternative test to that constructed under the Schaumburg-Munson-Riley trilogy. My normative approach accounts for the speaker-based interests related to charitable solicitation and builds upon a “civic conception of free speech” that better ensures “broad communication about matters of public concern” advanced both directly and indirectly through charitable solicitation.5 I contend that a balancing of interests rooted in a concern for democratic discourse offers a more principled and more cogent review of charitable solicitation regulation than the cumbersome formulations applied today.

For the entire article, go to this website:


May 29, 2009 in Publications – Articles | Permalink | Comments (0) | TrackBack (0)

Leaders of Muslim Charity Sentenced to 65 Years in Prison

The New York Times (based on an AP story) reports that a federal court sentenced the two founding members of the Holy Land Foundation for Relief and Development to 65 years in prison each for funneling millions of dollars to Hamas.  We previously blogged about their conviction on 108 counts in a second trial, after their first trial ended in a mistrial, as well as about the closing arguments in the second trial, the decision by prosecutors to drop a number of charges after the failed first trial, and the ACLU's attempt to remove the names of two other Islamic Charities removed from all court documents.  The Dallas Morning Newsreports that the three other convicted defendants received sentences ranging from 15 to 20 years, and that all five defendants continued to defend their actions.

For early commentary on the sentences, see this OMB Watch statement ("Holy Land Foundation Sentencing Raises Questions for U.S. Charitable Sector") and this Dallas Morning News editorial ("Holy Land Defendants Got What They Deserved").  I am not familiar enough with the facts of the case to comment on the correctness of the convictions or the sentences, but the convictions underline the need for U.S. based charities engaging in international charitable work to ensure they know where their funds are going and that the recipients have not been identified as terrorist organizations, even if they also do truly charitable work.


May 29, 2009 in Federal – Judicial, In the News | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 27, 2009

Americans United Asks IRS to Review Tax-Exempt Status of Liberty University

After Liberty University declined to officially recognize the status of a campus Democratic club, the group Americans United for Separation of Church and State asked the IRS to review the tax-exempt status of Liberty.  Here is an excerpt from a letter posted on Americans United website:

“Liberty University is a tax-exempt institution and isn’t allowed to support one party over another,” said the Rev. Barry W. Lynn, executive director of Americans United. “If the school insists on pushing policies that favor Republicans over Democrats, it should have to surrender its tax exemption.”

In a letter to the IRS today, Lynn officially requested a review of Liberty’s tax exemption. The letter notes the recent flap and argues that by giving official recognition and student funding to a Republican club but not a Democratic one, Liberty has run afoul of the tax code.

For the entire text of the IRS letter, go to this website:

(Hat Tip: Tax Prof Blog)


May 27, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Greenlining Report on Foundation Board Diversity

As promised yesterday, the Greenlining report on diversity of foundation boards is now available.  here are the key findings from the report:

  • One out of four board members of 46 largest foundations in the United States are people of color, including: 8.0 % who are Latino; 12.5% who are African American and 4.5% who are Asian American
  • 28.3% of the top 46 foundations have no people of color on their boards at all, including: 56.5% have no Latinos; 37.8% have no African Americans; and 69.6% have no Asian Americans
  • Foundations with diverse boards are also overwhelmingly the most diverse in their grantmaking; 47.1% of all grants to people of color-led organizations in 2005 were made by the foundations with the top 10 most diverse boards

For the entire Greenlining report "Diversity on Foundation Boards of Directors," go to the Greenlinging website at


May 27, 2009 in In the News, Studies and Reports | Permalink | Comments (1) | TrackBack (0)

Credit Union Beats IRS - Income from Insurance Sales Not Taxable

We previously blogged about the test case brought by Community First Credit Unionof Appleton, Wisconsin challenging the IRS position that the sale of credit life and credit disability insurance and guaranteed auto protection insurance resulted in taxable, unrelated business income.  The major national Credit Union associations supported the lawsuit, which they characterized as the lead case in the nation on this issue.  The Appleton Post-Crescent now reports that the Credit Union has won its case, having successfully proved that the income from these insurance sales is substantially related to the Credit Union's exempt purposes.  The article quotes the Credit Union's President as celebrating the victory as one for all state-chartered credit unions and their customers, a sentiment echoed by the Credit Union National Association.  While the amount at issue in this case was relatively small ($54,000), the issue appears to be a significant one for many if not most tax-exempt credit unions.  According to the Credit Union Times, a second lawsuit raising the same issue is already pending, brought by the Bellco Credit Union of Greenwood Village, Colorado.  The IRS does not appear to have commented on the decision or decided whether to challenge it with post-trial motions or an appeal.

(Hat tip: EO Tax Journal)


May 27, 2009 in In the News, State – Judicial | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 26, 2009

Hispanics Are Most Under Represented Group on Foundation Boards

Apropos of the annoncement earlier today that President Obama has nominated a Latina women for appointment to the U.S. Supreme Court, the Chronicle of Philanthropy reports that "Foundations are failing to recruit diverse board leadership, with Hispanics being the most under represented compared to their growing number in American society."  This statement is based on report by the Greenlining Institute.  The Chronicle article indicates that the Greenlining report would be out "on Friday," it was not available when I checked the website earlier today.  Hopefully, if the report is posted soon, we will be able to get it up on the Nonprofit Law prof Blog.


May 26, 2009 in In the News, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

America's Richest Meet Privately in New York to Discuss Giving

The Chronicle of Philanthropy reports that a small number of the U.S.'s top philanthropists recently met privately in New York to discuss charitable giving issues.  The group included Bill Gates, david Rockefeller, Sr., Oprah Winfrey and Mayor Bloomberg.  Here is an excerptt from the article:

While the meeting and its hush-hush nature has triggered intense speculation by the news media about what was discussed, Patricia Q. Stonesifer, former chief executive of the Bill & Melinda Gates Foundation, said it was simply a gathering of people who have a common passion for helping others.

“A group of philanthropists came together to discuss their giving,” said Ms. Stonesifer, who attended the meeting. “There’s really no secret about that. It was an informal get-together and a chance to exchange ideas about what motivates them and what they have learned so far.”

“There was an enormous amount of enthusiasm and excitement around their giving and that was a very big part of what they were there for,” she added.

To see the entire article, see "America's Top Philanthropists Hold Private Meeting to Discuss Global Problems" in the May 20, 2009, issue of the Chronicle of Philanthropy.


May 26, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Monday, May 25, 2009

Are Catholics in Maine Violating Tax-Exemption Laws by Collecting Signatures to Repeal Same-Sex Marriage Law?

The May 21, 2009, issue of the Washington Post has an article about a gay rights group in Maine that is challenging the tax-exempt status of a Catholic Diocese due to its support of a referendum to end same-sex marriage.  Here is an excerpt from the article:

A gay rights advocacy group claims that the Roman Catholic Diocese of Maine is violating tax rules by helping a referendum campaign that would repeal the state's new same-sex marriage law.

The Empowering Spirits Foundation said its challenge was filed Wednesday at an Internal Revenue Service office in Dallas. The San Diego-based group said the diocese is engaging in political activity by collecting signatures for the referendum, violating IRS rules applying to nonprofits.

For entire story, see "Gay rights group: Maine diocese violating tax law" in the May 21, 2009, issue of the Washington Post.


May 25, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Redirecting Art Musem Donations to Foodbanks

The May 21, 2009, issue of the New York Times has an interesting article about how wealthy individuals are making giving decisions during a time of downsized investment portfolis.  Here is an excerpt from the article:

Peter Frumkin, a sociologist at the Lyndon B. Johnson School of Public Affairs at the University of Texas, says donors operate from either of two “master theories of giving.”

“One theory is direct service to individuals; the other is change through advocacy and public education,” said Professor Frumkin, the author of “Strategic Giving.”

“In tough times,” he said, “people tend to gravitate toward direct service because they want something concrete from their giving.”

Direct service, he added, “is like buying bonds, and advocacy like growth stocks, and so in tough times donors rebalance their giving portfolios into safer investments.”

Assuming you still have the capacity to give, three techniques you can consider are conversion, deferral and triage.

For the entire article, see "Smart Giving in a Troubled Climate" in the May 21, 2009, issue of the new York Times.


May 25, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)