Thursday, February 25, 2021
Exciting times in the world of nonprofit law, as the Supreme Court will soon decide a case with potentially significant implications for regulation of nonprofits. Nonprofits challenge the constitutionality of a California law that requires the organizations to provide their unredacted Form 990 – including Schedule B’s list of major donors – to the State as a condition of soliciting donations in the state.
The petitioners/plaintiffs – conservative organizations Thomas More Law Society and Americans for Prosperity Foundation -- cite the risk of the information being publicly disclosed by the state and the fear their donors possess of being harassed if their support for these organizations is made public. The plaintiffs rely heavily on the NAACP v. Alabama case from the 1950s, where the Supreme Court struck down an Alabama ruling that required the NAACP to publicly disclose its members, finding that such a disclosure would pose significant challenges to the ability to associate to advocate against oppression. Petitioners do argue that their donors may be less willing to donate and may face reprisal if their identities are known, but they do not and cannot argue that they face the same levels of risk that members of the NAACP faced in the 1950s South. The analogy is further strained by the fact that California has promised not to publicly disclose the identity of major donors, which further reduces the risk to associational rights.
The government, in contrast, cites to Citizens United and Doe v. Reed, which blessed laws requiring disclosure of donors in election-related contexts as a way of supplying the electorate information on which to judge the messages we’re hearing. Yet California’s law isn’t triggered by election-related speech as in Doe and Citizens United. Instead, it is triggered by charitable solicitation for any cause, and applies broadly to organizations across the nonprofit spectrum.
Relying on precedent, the 9th Circuit rejected out of hand the plaintiffs’ facial challenge to California’s law. And finding that the plaintiffs failed to prove their case (rejecting the district court’s factual findings to the contrary), the 9th Circuit also rejected the plaintiffs’ as-applied challenge to the disclosure requirement. The Second Circuit had reached a similar conclusion in a challenge to an analogous provision in New York’s law, and there wasn’t a split on this narrow point. Yet the Supreme Court agreed to take the case, which will be argued towards the end of this term. There are a lot of vulnerabilities in the case for California (such as unfavorable factual findings by the district court, a sloppy regulatory canvas (for example, not enshrining the rule against public disclosure in statute)), but a loss for California could have ramifications well beyond California and well beyond the specific mandate challenged here.
While the entire case is complex, here are some of the questions that the Court might find it necessary to address:
- What is the standard of review: Is it strict scrutiny, intermediate scrutiny, “exacting” scrutiny, or something else entirely?
- Is the case best decided as a facial or as-applied challenge? Does it matter?
- Is a constitutional analysis only required upon a threshold associational showing of a risk of threats/violence/harassment/something else, or does it apply even in the absence of this predicate showing?
- Assuming that the mode of analysis is, or is similar in structure to, strict/exacting/intermediate scrutiny, what are valid government interests that would justify the compelled disclosure, and what level of proof is needed? Conversely, what are the relevant associational interests at stake, and what level of proof is needed?
- Does the rule change depending on the content area of the association’s speech (political v. ballot initiative v. lobbying v. other)? The parties seem keen to use content of speech (election-related versus something else) as a dividing line.
- What effect, if any, does the fact that these organizations already provide this information to the IRS have on their challenge? (For example, does the constitutional analysis change depending on whether the compelled disclosure is in the context of granting tax exemption (the IRS requirement) versus engaging in charitable solicitation (California rule)?
Joseph W Mead
Last week, the Treasury Inspector General issued a report, Obstacles Exist in Detecting Noncompliance of Tax-Exempt Organizations. From the summary:
Information reported on tax-exempt organizations’ returns does not always indicate noncompliance; therefore, the IRS relies heavily on referrals to identify abusive schemes. However, TIGTA found that although referrals may help detect tax schemes, they do not always lead to productive cases. In addition, the chances of examination for tax-exempt organizations is lower when compared to examination rates of businesses and individuals. For Fiscal Year (FY) 2019, the chance of examination for exempt organizations was one in 742, compared to one in 156 for businesses and one in 226 for individual taxpayers. Further, churches and certain other religious organizations are not required to file annual information returns making it difficult to track the activities of these organizations to identify noncompliance. For FY 2019, the chance of examination for churches was about one in 5,000.
Sunday, February 21, 2021
From the inbox:
The Committee on Nonprofit Organizations of the American Bar Association’s Business Law Section is calling for nominations for the “2021 Outstanding Nonprofit Lawyer Awards.” The Committee presents the Awards annually to outstanding lawyers in the categories of Academic, Attorney, Nonprofit In-House Counsel, and Young Attorney (under 35 years old or in practice for less than 10 years). The Committee will also bestow its Vanguard Award for lifetime commitment or achievement on a leading legal practitioner in the nonprofit field.
Nominations are due by March 22, 2021. For a nomination form, please go to the Nonprofit Organizations Committee webpage and scroll down to find the form under “2021 Outstanding Nonprofit Lawyer Awards." The Awards will be announced at the Business Law Section's Spring Meeting in April.
Friday, February 5, 2021
U.S. Senators and Representatives reintroduced the Spotlight Act again to repeal the regulations issued by Treasury and the IRS in 2020 that eliminated the requirement for many tax exempt organizations to have to disclose substantial donor names and addresses.
"U.S. Senators Jon Tester (D-Mont.) and Ron Wyden (D-Ore.) along with U.S. Rep. David Price (D-N.C.) today are reintroducing their Spotlight Act to shine a light on dark money political donors and hold the government accountable to enforce our nation's campaign finance laws. This legislation is also supported by Senators Bennet, Carper, Whitehouse, Blumenthal, Murray, Van Hollen, Merkley, Klobuchar, Hirono, King, Brown, Cortez Masto, Booker, Menendez, Casey, Warren and Baldwin.
The Spotlight Act would require certain political non-profit organizations to disclose their donors to the Internal Revenue Service (IRS), reversing a Trump-era rule that eliminated the requirement and allowed such organizations to keep their donors secret."
You can find the Act here.
Wednesday, February 3, 2021
Fascinating collision of art and activism with an art museum's brand attached to the chairman of its board of trustees. The Activist artist group the Guerrilla Girls have posted a prominent ad outside the Modern Museum of Art calling for it to end its relationship with Leon Black as a board member because of his strong connection to Jeffrey Epsten.
"The Museum of Modern Art (MoMA) in New York is facing increasing pressure to part ways with the chairman of its board of trustees, Leon Black, following revelations about the billionaire’s close ties with convicted sex offender Jeffery Epstein. The activist group Guerrilla Girls, which has been voicing this demand since 2019, revealed that it had canceled a book contract with Phaidon Press that same year after realizing the art publisher is owned by Black.
Guerrilla Girls claim that they contracted with Phaidon Press in 2018 to publish a book that surveys their activism since 1985. In a report by the New York Times, the group first revealed that it broke the contract a year later after news surfaced about Black’s relationship with Epstein. Instead, the group published Guerrilla Girls: The Art of Behaving Badly with Chronicle Books in 2020."
Tuesday, February 2, 2021
The Office of the Chief Counsel of the IRS recently issued a memorandum describing when nonprofits seeking charitable tax exempt status under section 501(c)(3) might receive relief from failing to file their application in a timely manner. For counsel meeting this problem, this memo is likely a very useful tool for considering options.
It's a long memo, but the basics are:
1. Under what circumstances, if any, should Exempt Organizations, Determinations (EOD) provide Treas. Reg. § 301.9100-3 relief to IRC section 501(c)(3) applicants?
2. What is the proper process for denying relief requests under § 301.9100-3? (i.e., does taxpayer have section 7428 Declaratory judgment rights?)
- Section 501(c)(3) organizations who are eligible to self-declare, like non-(c)(3) self-declarers, are not eligible for § 301.9100-3 relief because they did not fail to make a required regulatory election. Further, organizations that fail to file the necessary information returns holding themselves out as exempt organizations are not eligible for § 301.9100-3 relief because they would not otherwise be exempt for the period for which they are requesting relief. In addition, the Internal Revenue Service (“Service”) is justified under the applicable standard of review to deny such relief on the grounds that the organizations did not act in reasonable good faith. Finally, organizations that have filed the necessary information returns are not eligible for relief beyond the date of which the statute of limitations on assessment of tax has expired, which is typically three years after the due date of the return.
- Denial of § 301.9100-3 relief by EOD does not separately provide a right to petition the Tax Court under section 7428 because § 301.9100-3 relief is purely a function of administrative grace, is not a justiciable controversy described in section 7428, and is reviewed under a completely separate standard than the de novo standard used in section 7428 actions. However, section 7428 jurisdiction over the denial of exempt status for periods prior to the postmark date of the
application appears to be a matter of first impression."
Thursday, January 21, 2021
The Washington Post reports that Joseph Biden, the second-ever Roman Catholic U.S. president, was greeted on his Inauguration Day with contrasting messages from his church: A warm blessing from Pope Francis — and a statement by the president of the U.S. Conference of Catholic Bishops saying that Biden “will advance moral evils,” including contraception, abortion and same-sex marriage.
The statement by Los Angeles Archbishop José Gomez immediately set off a debate among U.S. bishops, who, like U.S. Catholics, are bitterly divided on the direction of their extensive denomination and its entanglement with partisan politics. Those divisions are coming to a head in the figure of Biden, who makes it clear with his weekly churchgoing, his frequent references to Catholic teachings and culture, and his use of Catholic symbols that he is indeed a part of the church.
The current dispute over how to contend with the new president features dueling comments from leading bishops.
On one hand, Archbishop Gomez stated:
In a time of growing and aggressive secularism in American culture, when religious believers face many challenges, it will be refreshing to engage with a President who clearly understands, in a deep and personal way, the importance of religious faith and institutions. I must point out that our new President has pledged to pursue certain policies that would advance moral evils and threaten human life and dignity, most seriously in the areas of abortion, contraception, marriage, and gender. Of deep concern is the liberty of the Church and the freedom of believers to live according to their consciences.
Cardinal Blase J. Cupich, rejects this thinking:
Today, the United States Conference of Catholic Bishops issued an ill-considered statement on the day of President Biden’s inauguration. Aside from the fact that there is seemingly no precedent for doing so, the statement, critical of President Biden came as a surprise to many bishops, who received it just hours before it was released. The internal institutional failures involved must be addressed, and I look forward to contributing to all efforts to that end, so that, inspired by the Gospel, we can build up the unity of the Church, and together take up the work of healing our nation in this moment of crisis.
The Catholic Bishops have in the past taken a more positive and collaborative tone towards new presidents. For example, in 2016, the conference put out a statement congratulating Donald Trump, saying it “looks forward to working with President-elect Trump to protect human life from its most vulnerable beginning to its natural end.”
San Diego Bishop Robert W. McElroy said he was “echoing Pope Francis’ message to President Biden and calling for dialogue, not judgment; collaboration, not isolation; truth in charity, not harshness. … It is a pathway of reconciliation that places the healing of our society ahead of any specific policy issue, in the recognition that repairing the soul of our country is the pre-requisite for any sustainable effort to advance the common good. … Most importantly of all, Pope Francis’ message to President Biden fundamentally speaks to him in his humanity, a man of Catholic faith striving to serve his nation and his God.”
On Wednesday morning, President Biden received a message from the Pope: “Under your leadership, may the American people continue to draw strength from the lofty political, ethical and religious values that have inspired the nation since its founding,” said Francis, who had called Biden on Nov. 12 to offer his congratulations and to discuss working together on issues including poverty, climate change and integrating immigrants and refugees.
Thursday morning, the USCCB put out four statements — an unusually busy morning for the Conference — praising actions Biden took the day before, including lifting the Muslim ban, and fortifying the “Dreamers” program that allows young immigrants to stay in the U.S. for work and school.
Prof. Vaughn E. James, Texas Tech University
The Metropolitan Museum of Art in New York City (The Met) on Tuesday announced that it has received a gift from trustee Marina Kellen French to endow the museum's directorship position.
The gift is being awarded through the Marina Kellen French Trust Foundation and the Anna-Maria and Stephen Kellen French Foundation. The gift will also provide support for general operating expenses. In recognition of the gift, the director's position, which has been held by Max Hollein since 2018, will be renamed the Marina Kellen French Director.
According to a January 19 press release from The Met,
The Director is responsible for the vision and leadership of the Museum and its encyclopedic collection of nearly 2 million objects spanning 5,000 years. The Director’s responsibilities include oversight of the Museum’s curatorial, conservation, and scientific research departments; its exhibition and acquisition activities; education and public outreach; and other mission-oriented areas, including the libraries, digital initiatives, publications, imaging, the registrar, and design.
The release also quoted Daniel H. Weiss, President and CEO of The Met, as saying,
We are immensely grateful to Marina Kellen French for this remarkable gift, which helps ensure the Museum’s strong artistic leadership for many years to come. For more than 70 years—almost half of The Met’s history—her family has championed the arts and enabled the Museum to become a global leader in the cultural sphere.
French previously endowed The Met's Department of European Sculpture and Decorative Arts' Marina Kellen French Curatorship and helped pioneer the museum's Executive Leadership Program.
Prof. Vaughn E. James, Texas Tech University
Wednesday, January 20, 2021
A recent press release from the University of Southern California reveals that research conducted by the University of Southern California and Princeton University has concluded that the COVID-19 pandemic has significantly reduced life expectancy in the United States, with Black and Latinx Americans disproportionately impacted.
Based on estimates of deaths under four scenarios — one in which the pandemic had not occurred and three that include COVID-19 mortality projections — by the Institute for Health Metrics and Evaluation, the report, Reductions in 2020 US Life Expectancy due to COVID-19 and the Disproportionate Impact on the Black and Latino Populations, found that as a result of pandemic deaths in 2020, Americans' overall life expectancy will fall 1.13 years, to 77.48 years — the single largest decline in at least forty years and the lowest number since 2003.
The study also identified significant disparities by race, with researchers projecting that life expectancy for African Americans will fall 2.1 years, to 72.78 years; by 3.05 years, to 78.77 years, for Latinx individuals; and by 0.68 years, to 77.84 years, for white Americans.
Reporting on the projections, today's Philanthropy News Digest quotes Theresa Andrasfay, a postdoctoral fellow at the USC Leonard Davis School of Gerontology and co-author of the report as stating: "While the arrival of effective vaccines is hopeful, the U.S. is currently experiencing more daily COVID-19 deaths than at any other point in the pandemic. Because of that, and because we expect there will be long-term health and economic effects that may result in worse mortality for many years to come, we expect there will be lingering effects on life expectancy in 2021. That said, no cohort may ever experience a reduction in life expectancy of the magnitude attributed to COVID-19 in 2020."
As an African American, I dare say the result of this study does not make me too happy.
Vaughn E. James, Texas Tech University
Here is some good news on this Inauguration Day: Philanthropy News Digest is reporting that Creighton University in Omaha, Nebraska, has announced a $25 million gift from a foundation that wishes to remain anonymous in support of a global medical scholars program aimed at improving the health and well-being of people living in poverty. According to the Digest:
The Arrupe Global Scholars and Partnerships Program will make it possible for program participants to earn a medical degree while working alongside international healthcare workers and Creighton faculty on multiyear projects designed to address significant global health challenges. Named for the founder of the Jesuit Refugee Service, Rev. Pedro Arrupe, the program will support twelve students a year, over ten years, enrolled in medical programs on the university's Omaha or Phoenix campus. Scheduled to launch in the fall of 2022, the program also will pair Creighton faculty with in-country healthcare workers to address local clinical education needs and design and advance public health programs that strengthen the knowledge and skills of local providers.
The Digest also quotes Michael Kavan, associate dean for student affairs at the Creighton University School of Medicine, as saying, "Creighton is known for producing physicians committed to the Jesuit value of caring for the whole patient — mind, body, and spirit. Our graduates then go on to careers in which service for and with others is central to their practices. The Arrupe Global Scholars and Partnerships Program will build upon this foundation in forming future doctors who consciously and compassionately care for some of the world's most vulnerable populations."
Good news, indeed!
Prof. Vaughn E. James, Texas Tech University
Monday, January 18, 2021
While nonprofits of many hues have suffered greatly during the COVID epidemic, perhaps among those most terribly affected are 501(c)(3) organizations operating theaters and other performance-based venues. In a recent poll done by Nonprofit Quarterly, representatives of organizations from a variety of corners in the nonprofit industry were polled on how badly the ongoing global crisis has impacted their revenue: a majority of arts-oriented organizations reported above 16% reductions in their revenue.
The data tells an unsurprising tale: when your business relies upon drawing large crowds of people into confined spaces so that they can be entertained by your staff, a worldwide virus running rampant and corresponding countermeasures by harried governments adds up to hard times ahead. However the United States legislature seems to be cognizant of this at-risk industry: included in December’s coronavirus bill was $15 billion set aside especially for theaters, concert halls, museums and others which have more than a 25% loss in gross revenues in 2020. Naturally a number of restrictions apply on which organizations (strip clubs are for, example, disqualified) can apply for a grant under the Save Our Stages section of the relief bill, this legislation indicates that the country’s lawmakers are considering particular industries which have been especially injured by the epidemic and aiming to lend financial support when it is most needed.
For a more thorough explanation of the Save Our Stages section as well as testimony from a number of nonprofit leaders in the aforementioned affected industry, see the Nonprofit Quarterly publication on the subject at https://nonprofitquarterly.org/save-our-stages-provides-a-lifeline-for-nonprofit-museums-and-theaters/
David Brennen, University of Kentucky College of Law
Thursday, January 14, 2021
Further developments arose for the scandal-beset Boy Scouts of America toward the end of 2020. Along with suffering significant financial setbacks like many other businesses due to the COVID epidemic, this year the BSA has also had to contend with both filing for bankruptcy and the consequences of mounting accusations of sexual abuse within its ranks. As part of its bankruptcy filing early in the year, BSA was required to create a trust fund for persons sexually abused by Scout personnel and to provide a deadline by which the victims should bring forward a case. That deadline passed in November and the total number of cases currently up for consideration is staggering: nearly 100,000 people have come forward stating that they were abused by the organization.
What remains to be seen is whether the national BSA organization will manage to successfully stay financially afloat during its bankruptcy as well as shield the assets of local Boy Scout councils from claims: currently, only the national organization’s $1 billion in assets are certainly under threat.
David Brennen, University of Kentucky College of Law
For the full story read the Washington Post article on the subject: https://www.washingtonpost.com/dc-md-va/2020/11/19/boy-scouts-bankruptcy-abuse/
2020 was undoubtedly an unkind year to nonprofits in America, but there were at least a couple of positive developments for the industry: one of these was the IRS granting retroactive refunds for taxes nonprofit organizations paid for the “parking lot tax” which the legislature repealed in 2019. This tax, included in the 2017 Tax Cuts and Jobs Act, imposed a sizable unrelated business income tax on subsidized parking offered by these organizations to their employees. Many in the nonprofit industry objected to the parking lot tax on the grounds that it went too far in expanding the unrelated business income tax and placed an unfair burden on the often slim resources of nonprofit organizations. While the relevant legislation went into effect in 2019, the IRS has been issuing and updating guidance about getting a refund for parking lot taxes paid in prior years throughout 2020: for the IRS’s official statement, see https://www.irs.gov/forms-pubs/how-to-claim-a-refund-or-credit-of-unrelated-business-income-tax-ubit-or-adjust-form-990-t-for-qualified-transportation-fringe-amounts.
For additional reading on this topic see https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/irs-authorizes-parking-benefit-tax-refunds-for-nonprofits.aspx.
David Brennen, University of Kentucky College of Law
Tuesday, January 12, 2021
An article written by Joshua Rosenberg of Law360 last month provides interesting insight for persons not intimately familiar with the oftentimes intricate subject area of tax-exempt organization regulation. Where once the IRS led the way in prosecuting potential tax infractions by nonprofit organizations, it now seems that state governments have stepped to the fore in that arena. As illustration, Rosenberg points to events such as the recent victory by New York’s attorney general in bringing a case against the National Rifle Association which made headlines nationwide last year. Developments such as this, says the article author, “have set the tone at the state level for policing charities, even though they’re unable to directly adjudicate the tax-exempt status of those organizations.”
Balanced against this upswing in the vigilance of state governments is a certain amount of apathy by the Internal Revenue Service in policing nonprofit organizations. This is likely due in no small part to dramatic funding cuts in 2013 when the Agency faced criticism (and indeed was ultimately found liable in the matter) for subjecting to strict scrutiny a number of conservative groups applying for charitable organization status
For Rosenberg’s succinct and informative discussion of the topic including what this means for nonprofit tax infraction enforcement moving forward, see: https://www-law360-com.ezproxy.law.uky.edu/articles/1336984/states-not-irs-lead-in-policing-tax-exempt-organizations
David Brennen, University of Kentucky College of Law
Monday, January 11, 2021
Early this afternoon the Federal Trade Commission announced its plans to levy fines in excess of forty-seven million dollars on a number of educational broadband providers. The FTC alleges that those providers have violated the agency’s mandate that use of the 2.5 GHz band be reserved solely for educational organizations. Instead of only providing broadband service to educational entities, providers North American Catholic Educational Programming Foundation and Voqal USA stand accused of also providing service to private entities for added profit. Interestingly, the decision within the FTC to impose the fines is somewhat divided along party lines: Republican commissioners have spearheaded the fine levy on the grounds that such action holds providers accountable to the interests of the public in providing accessible broadband to educational entities, whereas Democratic members dissented from the decision on the grounds that it represents an unlawful attack on entities which are providing a vital service during a crisis when that service is needed more than ever. Both of the providers being fined object on the grounds that the FTC repealed its educational use mandate: whether they will be successful in arguing their case remains to be seen, as the fines are currently only in the proposal stage.
David Brennen, University of Kentucky College of Law
To read a more in-depth analysis of this development, see Law360’s article on the subject at https://www-law360-com.ezproxy.law.uky.edu/articles/1343078/fcc-floats-47-5m-in-fines-over-alleged-2-5-ghz-band-misuse
Saturday, January 9, 2021
Congratulations to fellow blogger Philip Hackney (University of Pittsburgh) on being the 2020 recipient of the Outstanding Academic Award in the Nonprofit Sector from the Nonprofit Committee of the ABA's Business Law Section. A very well deserved honor for his many contributions to both scholarship in the field and the public's understanding of the law relating to nonprofits.
Michael Kopel (University of Graz) and Marco A. Marini (Ph.D. student, University of Rome La Sapienza) have posted Mandatory Disclosure of Managerial Contracts in Nonprofit Organizations on SSRN. Here is the abstract:
Nonprofit organizations have been recently mandated to disclose the details of their executives’ compensation packages. Contract information is now accessible not only to current and prospective donors, but also to rival nonprofit organizations competing for donations in the fundraising market. Our aim is to investigate the impact of publicly available contract information on fundraising competition of nonprofit organizations. We argue that, although such provision makes contract information available to multiple stakeholders and increases the transparency of the nonprofit sector, it also induces nonprofits to use managerial incentive contracts strategically. In particular, we find that the observability of incentive contracts relaxes existing fun draising competition. This is beneficial in terms of nonprofits’ outputs, in particular when these organizations are trapped in a situation of excessive fundraising activities. However, we show that publicly available contract information distorts nonprofits’ choice of projects, thus potentially inducing socially inefficient project clustering.
Ian Murray (University of Western Australia) has published Donor Advised Funds: What Can North America Learn From the Australian Approach? in the Canadian Journal of Comparative and Contemporary Law. Here is the abstract:
Charity law is a public and private hybrid that seeks to balance donor intent with the achievement of public benefit. In supporting that balance, regulatory frameworks typically intrude less on donor intent when the recipient charity is a publicly controlled charity, rather than a private foundation. This approach is challenged by the rise of donor advised funds — public charity intermediaries that behave in many ways like privately controlled foundations. The rise has been particularly marked in the United States, but is also apparent in Canada and Australia. Pertinently, while Australia took many years to regulate private foundations, it shortly afterwards also introduced specific rules for public charitable foundations. This article therefore examines whether the United States and Canada can draw guidance from Australia’s experience in dealing with donor advised funds, especially in relation to delay in distributions and conflicts of interest.
Nara Yoon (Ph.D. student, Syracuse University) has published Understanding theoretical orientation and consequences of board interlock: Integration and future directions in Nonprofit Management & Leadership. Here is the abstract:
Board interlock represents a phenomenon where organizations are connected via overlapping board members and executives. Board interlock is an important area of research in governance study because of its potential to impact governance outcomes through the flow of information, resources, and status. Despite its potential significance, the role of board interlock in governance has not been explicitly discussed in the nonprofit board governance literature. I review and synthesize corporate and nonprofit board governance literature and link this literature to the study of board interlock. Then, I review the extant literature on the antecedents and consequences of board interlock. I conclude by identifying gaps in the literature and proposing directions for future research.
And the Atlanta Journal-Constitution reports the latest major development relating to conservation easement deductions. Two accountants have plead guilty to conspiracy to defraud the United States through promoting syndicated land conservation easements. The scheme they promoted allegedly resulted in more than $1.2 billion in fraudulent charitable deductions. It will be interesting to see whether in exchange for sentencing leniency (the charge carries a sentence of up to 5 years in prison) the accountants provide important evidence relating to their clients and other promoters.