Nonprofit Law Prof Blog

Report: Urban Schools Losing Best teachers to Neglect

Today's Philanthropy News Digest is reporting that a new study indicates that "urban schools are systematically neglecting and losing their best teachers every year, even as they retain many of their lowest-performing teachers, with serious consequences for students, schools, and the teaching profession."

According to the Digest,

Issued by TNTP, a national nonprofit dedicated to ensuring that all students are taught by excellent teachers, the report, The Irreplaceables: Understanding the Real Retention Crisis in America's Urban Schools, estimates that the nation's fifty largest school districts lose ten thousand high-performing teachers every year. These are teachers who are able to advance their students' learning by an additional two to three months in math and reading compared with the average teacher — and five to six months compared to low-performing teachers — while their students go on to demonstrate better educational and employment outcomes. What's more, when an "irreplaceable" teacher leaves a low-performing school, the chances of a potential replacement being of comparable quality is only one in eleven.

Now that is sad...

VEJ

 

 

 

Panel Proposes Overhaul of CFC

The Federal Times is reporting that in its final report, the CFC-50 Commission has made several recommendations to fix chronic problems afflicting the Combined Federal Campaign.  According to the panel of experts tasked with improving the federal government's annual charity drive, the Campaign's "financing should be overhauled, collections should be expanded to federal and military retirees, and the campaign season should be extended a month." 

The Obama Administration assembled the panel last year amid declining campaign receipts.  According to the Federal Times,

Funds donated to CFC have declined each year since hitting an all-time high of $282.6 million in 2009, reaching $272.7 million in last year’s campaign. And while the average federal employee pledge has risen over the last 50 years — hitting $284.27 last year — the participation rate has steadily trended downward to 24 percent. 

In its final report released last Friday, the commission stated that to arrest the decline, the Office of Personnel Management "must increase donor participation, strengthen the campaign’s infrastructure, and increase transparency and accountability."

These are honorable goals, but let's face reality: we are all facing difficult times and maybe, just maybe, charitable giving is not as important as it once was to Americans.  A sign of the times....

VEJ 

  

More on Use of 501(c)(4)s in the Political Campaign Context - Disclosure Requirements, Need For Reform

As reported in The New York Times as well as other news sources (including the live blogging herein), the IRS announced in Congressional hearings on Wednesday that 50 political groups have obtained 501(c)(4) exemptions in 2010 and 2011.

In the Forth Worth Star-Telegram, an editorial entitled "IRS needs to strengthen tax code to uncover political nonprofits" criticizes the use of 501(c)(4)s for political campaign purposes, concluding:  "Tax-exempt status is intended to promote the public good, not enable wealthy and powerful donors of any political stripe to wield influence without public scrutiny."

In the BNA Daily Tax Report on Wednesday, an article addressed the disclosure requirement with respect to 501(c)(4) donors.  Although 501(c)(4)s are required to inform the IRS, but not the public, of the identity of donors, many organizations find ways around these full disclosure rules.  The organization can list the donor as "anonymous" if it doesn't know where the money originated from and "can't easily find out," or client trust accounts are used (i.e., donors make contributions through law firms that transmits the money to the organization, with only the law firm's name disclosed).  Cashier's checks and bank wire transfers are other means to keep donors anonymous and, thus, out of the IRS's purview.  Another potential area for reform?

NAM

 

Colinvaux: The Conservation Easement Tax Expenditure

Roger Colinvaux (Catholic) has published "The Conservation Easement Tax Expenditure:  In Search of Conservation Value," in the Columbia Journal of Environmental Law, Volume 37.  The SSRN abstract provides:

Federal tax law has long provided a tax benefit for charitable contributions of easements for conservation purposes. A fundamental problem with this conservation easement tax expenditure is that the measure for the tax benefit – lost economic development value – is erroneous. Use of such an erroneous measure obscures the conservation benefits of the program by focusing attention and resources on divining a largely extraneous and unhelpful number. Further, to a considerable extent, the easement program is reflexively justified and understood based on this false measure, as if it represented the conservation value of the program. The Article argues that, in theory, the measure for the tax benefit should be changed to one that better approximates conservation value. This would help ensure that the program is efficient, in the sense that conservation benefits would exceed program costs.

However, the theory must account for the fact that conservation value is not, at least not yet, readily susceptible to quantification for tax purposes. Accordingly, the Article also argues that a second-best approach would be to change the measure of the tax benefit to a more objective number – the fair market value of the underlying fee interest – not only to provide greater certainty but more importantly to shift administrative and legal resources and attention to where it should be: on the conservation benefits of the program. Finally, the Article argues that serious consideration should be given to converting the deduction to a credit, both to make the tax benefit more equitable and also to provide greater flexibility, by more easily allowing for different levels of tax benefit to be provided based on satisfaction of conservation criteria, which could and should evolve over time to account for society’s changing needs. In any event, irrespective of the details, the conservation easement tax expenditure should be designed to promote a concept of conservation value – an affirmative value – that represents the best use of the land. The value of the tax expenditure should no longer be defined by what is lost, but rather by what is gained.

NAM

Halperin: A Better Way to Encourage Gifts of Conservation Easements

Daniel I. Halperin (Harvard) has published "A Better Way to Encourage Gifts of Conservation Easements" in The Shelf Project, Volume 136 (July 2012).  The abstract posted to SSRN: 

The author’s proposal would repeal the deduction for the appraised value of a conservation easement that is allowed by current law. Congress should consider replacing the subsidy with a program of direct grants or limited-budget tax credits administered by an expert agency. If the deduction is continued, eligible donees should be only large institutions with a large portfolio of easements and resources and motives to enforce the easement, there should be an excise tax on nonenforcement of the easement, and there should be another government agency other than the IRS involved in enforcement. The special higher allowances for the deduction of appreciated property allowed by current law should be repealed.

The proposal is offered as a part of the Shelf Project, a collaboration of tax professionals to develop proposals to raise revenue without a VAT or a rate increase. Shelf Project proposals raise revenue while making the tax system more efficient and reducing deadweight loss. Shelf projects follow the format of a congressional taxwriting committee report in explaining current law, what is wrong with it, and how to fix it.

NAM

Conservation Easements in the Forest Legacy Program

Jessica Owley (SUNY-Buffalo) and Stephen J. Tulowiecki (SUNY-Buffalo) have published "Who Should Protect the Forest?:  Conservation Easements in the Forest Legacy Program" in the Public Land and Resources Law Review, Volume 33.  The abstract of the article posted to SSRN:

Increasingly, governments are turning to nongovernemental actors to carry out environmental protection goals. This has been particularly prevalent in the realm of land conservation. Government programs often draw upon the power of nonprofit conservation organizations known as land trusts to monitor, manage, and enforce land protection goals. Reliance on land trusts has created both philosophical and practical conundrums. These concerns also stem in part from the chief land protection tool used by land trusts: conservation easements. This article examines these concerns by a close look at the role of land trusts and conservation easements in the Forest Legacy Program.

Administered by the U.S. Forest Service, the Forest Legacy Program seeks to slow conversion of private forestlands to nonforest uses. Conservation easements form a key element of the Program, but their use is complicated. In creating the Program, Congress seemed to both want to encourage the involvement of land trusts and to curb their reach. The Program draws upon the power of private organizations, and increasingly calls upon land trusts to carry out the duty of protecting forestlands and yet stops short of enabling these organizations to receive Program funds or to enforce conservation easements purchased with Program funds. Thus, in the FLP, Congress inches toward privatization of forestland conservation, but holds back. This stance is bewildering. If Congress was concerned with the involvement of land trusts in forestland conservation, it seems to give them too much power. If Congress wanted to encourage greater land trust involvement, it seems to stop too short.

NAM

Corporate Philanthropy and the Boundaries of the Firm

Frederick Bereskin (Univ. of Delaware-Finance), Terry L. Campbell II (Univ. of Delaware-Finance), and Po-Hsuan Hsu (Univ. of Hong Kong) have posted "Corporate Philanthropy and Expansive Innovation:  Implications for the Boundaries of the Firm," to SSRN.  The abstract of the article is as follows:

We examine the association between corporate giving and innovation, using a unique data set of both direct giving and foundation giving. We find that direct giving by firms is positively associated with both higher innovation quantity and quality and more collaborative and explorative innovation. This relation is robust to increased lags, tests for sample selection bias, and reverse causality, suggesting that direct giving helps firms expand their knowledge frontier. In contrast, our results do not hold for giving by corporate-sponsored foundations. Our findings provide broad evidence of the distinct motives by which firms choose between direct giving and giving through a corporate foundation and have implications for why firms prefer to avoid mandatory disclosure of direct giving. Our results support the hypothesis that firms can use direct philanthropy to pursue innovative strategies that expand the boundaries of the firm.

 NAM

McLaughlin: Extinguishment of Perpetual Conservation Easements

Nancy A. McLaughlin (Utah) has published "Extinguishment of Perpetual Conservation Easements:  Charting a Course after Carpenter," in the Florida Tax Review, Vol. 13.  The SSRN abstract on the article is as follows:

In Carpenter v. Comm’r, T.C. Memo. 2012-1, the Tax Court addressed a key aspect of the requirement that the conservation purposes of tax-deductible conservation easements must be “protected in perpetuity” — the manner in which such easements may be permissibly extinguished. This is a critically important issue. Federal taxpayers are investing billions of dollars in conservation easements through the federal charitable income tax deduction under § 170(h), and this enormous investment will be for naught if the permanent protections prove to be ephemeral because the easements are later extinguished or otherwise not enforced. While Carpenter provides some helpful guidance, it also has created confusion and caused some to argue that the process for extinguishment set forth in the Treasury Regulations is optional, and that states, localities, and even holders are free to adopt their own extinguishment procedures. This article examines Carpenter. Among other things, it discusses the holding that the conservation easements at issue constitute restricted charitable gifts, and the critical importance of this status in ensuring that government and nonprofit holders will be legally bound to administer easements in accordance with their stated terms and purposes over the long term. It also explains that the Congress intended to subsidize the acquisition of perpetual conservation easements — or those that are extinguishable only upon frustration of their purposes — and that the provisions addressing extinguishment in the Treasury Regulations should not be considered optional. The article also recommends that Congress, the Treasury Department, and the IRS be proactive in addressing the issues of extinguishment as well as amendment of tax-deductible conservation easements. Without clear guidance on these issues, the purportedly perpetual protections will erode over time, and the enormous public investment in these instruments and the conservation values they are intended to protect in perpetuity will be lost.

NAM

Liveblogging the Ways & Means Subcommittee Hearing

As my fellow blogger Nicholas Mirkay noted earlier in the week, the second House Ways & Means Subcommittee on Oversight hearing on exempt organizations is scheduled for this morning at 9:30 EST.  I'll be liveblogging the hearing in the comments to this post (see the fine print just below the post.)  I have to manually enable the comments on Typepad, so there may be a little bit of a delay as they go up.   I will also be doing this *live* so I'm going to beg your forgiveness for typos and such from the outset.

It is a fantastic line up this morning.  Sometimes, it is easy to get cynical about who ends up on these panels but not today - the Subcommittee did its homework and got some great people, including Prof. John Colombo (who posts here, not that we are biased!), Prof. Donald Tobin (well known to all of us who teach tax), Thomas Hyatt of SNR Denton, and Eve Borenstein, Queen of the Form 990.  I really think it will be an informative hearing.  Here's a link to the official announcement. 

If you are so inclined, you can watch this streaming here.   As statements and such become public, I'll update this post to include links to them.  So warm up your coffee and off we go... To the comments!

EWW

UPDATE:  Hopefully, all of those comments came through for you all.  Feel free to contact me if there were any issues.  Here are some of the posted materials for the day:

Boustany Opening Statement

Link to all Testimony

By the way, in my comments I sometimes refer to the Comn'r as short hand - I mean Steve Miller, who is actually Deputy Commissioner for Sevices and Enforcment and used to be the head of TEO for the IRS. 

SECOND UPDATE:  Some of the later comments are not showing up when I hit comments on the front page (after the post where I indicate I have technical issues).  They are, however, showing up in the dashboard for bloggers, so I will try to figure that all out.  Please drop a comment if the last one you see from me is that I'm having technical issues, or if they go all the way to the end of the hearing.

 

Is IRS Rethinking 501(c)(4) Political Activity Rules?

As reported in today's Daily Tax Report, IRS EO Director, Lois Lerner, stated in a July 17th letter to an organization raising concerns about the political campaign activities of 501(c)(4) organizations: 

The IRS is aware of the current public interest in this issue. These regulations have been in place since 1959. We will consider proposed changes in this area as we work with the IRS Office of Chief Counsel and the Treasury Department's Office of Tax Policy to identify tax issues that should be addressed through regulations and other published guidance.

As stated in the Daily Tax Report, "it is the first time the Service has publicly said it would consider new rules to govern the eligibility of Section 501(c)(4)s."  Obviously, any reconsideration of the permitted political activities, and the amount thereof, by 501(c)(4)s is big news in the nonprofit sector as well as the national political scene.  Stay tuned!

  

(See also:  Chronicle of Philanthropy)

 

NAM

Boustany Calls Second Hearing on Tax-Exempts

Last Wednesday, House Ways and Means Oversight Subcommittee Chairman Charles Boustany (R-La.) announced that a second hearing on tax-exempt organizations (the first was held on May 16 as blogged herein) will be held on July 25, 2012.  Per the Ways and Means Committee website:

The hearing will focus on organizational and compliance issues related to public charities, including the increased complexity of public charity organizational structures, the rules governing profit-generating activities giving rise to unrelated business income tax, and whether the newly redesigned Form 990 is promoting increased compliance and transparency.

In the announcement, Boustany makes the following oversight comment:

Given the size and scale of the operations of public charities, which in 2008 had over $2.5 trillion in assets, it is critical that the Subcommittee continue its review of the tax-exempt sector.  Indeed, over the last two decades, the organizational structures of public charities have become increasingly complex, creating compliance and transparency issues.  This hearing is an excellent opportunity for the Subcommittee to hear from the IRS and experts in the tax-exempt community.  Their insight will allow the Subcommittee to better understand what is driving organizational complexity, and to learn about the new compliance efforts by the IRS and the UBIT rules.

No expert witnesses have yet been announced.

(Hat tip:  Daily Tax Report)

**Update: Contributing editor Elaine Waterhouse Wilson will be live blogging on July 25th during the hearing. 

NAM

Stanley: Revisiting the Constitutionality of the Johnson Amendment

Erik W. Stanley (Senior Legal Counsel, Alliance Defense Fund) has published:  LBJ, the IRS, and Churches: The Unconstitutionality of the Johnson Amendment in Light of Recent Supreme Court Precedent, 24 Regent U. L. Rev. 237 (2012).  The introduction to the article provides:

Part I of this Article examines the history of church tax exemption and demonstrates that exemption for churches is an unbroken practice with an extremely long historical pedigree. Thus it should not be lightly cast aside, and any threat to its existence should be taken seriously. Part I also traces the history of the restrictions on church tax exemption added by Congress in 1934 and 1954, including the history of the Johnson Amendment and the suspect circumstances surrounding its passage.

Part II analyzes the history of IRS enforcement of the Johnson Amendment, discussing the uneven and sporadic nature of that enforcement. The IRS’s vague and uneven enforcement scheme has resulted in a pervasive and palpable chill on the speech of pastors and churches as they have self-censored in order to avoid potential Johnson Amendment violations and the extreme consequences associated with such violations.

Part III builds on the prior two points and analyzes the Johnson Amendment in light of the recent Supreme Court cases of Citizens United v. FEC, Arizona Christian School Tuition Organization v. Winn, and Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC. The Article concludes that these cases provide important indications that the Johnson Amendment is an unconstitutional violation of the Free Speech and Free Exercise Clauses of the First Amendment, and that it cannot be justified by reliance on tax subsidy theories of regulation.

It is not the goal of this Article to repeat the work of legal scholars who have analyzed the Johnson Amendment from various angles. The great weight of that legal scholarship leans decidedly in favor of the conclusion that the Johnson Amendment is unconstitutional as a violation of the First, Fifth, and Fourteenth Amendments of the United States Constitution as well as the Federal Religious Freedom Restoration Act. Rather, this Article offers a fresh look at the Johnson Amendment in light of recent Supreme Court precedent that has direct bearing on its constitutionality. This precedent—when viewed in light of the history of church tax exemptions, Congress’s adoption of the Johnson Amendment, and the IRS’s enforcement of the Johnson Amendment—demonstrates that the pastors who participated in Pulpit Freedom Sunday were justified in challenging the Johnson Amendment and should not have long to wait before it is declared unconstitutional or repealed.

(Hat tip:  TaxProf Blog)

NAM

Donor Advised Funds ... Let's get ready to rumble!

In the red corner - The US Treasury

In the blue corner -  The Congressional Research Service

The bout - mandatory payouts from donor advised funds

In December, 2011, Treasury issued the long awaited "Report to Congress on Supporting Organizations and Donor Advised Funds," which was mandated by the Pension Protection Act (PPA).  In general, the Treasury report took the position that many of the reforms implemented as part of the PPA were sufficient to address the abuses seen in the area.  With specific regard to DAF distributions, Treasury noted favorably that the average payout rates for donor advised funds exceeded the private foundation 5% requirement, although Treasury did indicate that it was premature to make any recommendation based on the paucity of available data (DAF information was added to the Form 990 in 2008)(Treasury Report pp. 81-82).

Fast forward six months.  On July 11, the Congressional Research Service issued, "An Analysis of Chariable Giving and Donor Advised Funds," using many of the statistics regarding donor advised funds cited in the Treasury report.  Unlike the more cautious but generally favorable Treasury report, the CRS report concluded that donor advised funds should have a mandatory distribution requirement - and further, that it should be applied on a per fund basis.  The CRS report focuses on the fact that although average distribution rates among donor advised funds are quite high, there are many DAFs that make little or no distributions at all.  Janne Gallagher at the Council on Foundations (CoF posted the CRS report linked above, which is not generally available online) wrote a critique of the CRS report, posted at the CoF site here.  

Interestingly, the Summary section of the CRS report notes that "The Treasury study was released in 2011.  Senator Chuck Grassley, Senate Finance commitee chairman at the time of the 2006 legislation, has criticized the study as being 'disappointing and nonresponsive.'"

Despite all the statistics and analysis, however, it seems to me that the case has not been made from a policy perspective as to why we should (or should not) require a payout from DAFs.  I find myself saying, "well, so there are a few DAFs not making annual distributions - so what?"  To some degree, the CRS report comes the closest to reciting a reason - that DAFs are in fact under the functional control of their donors and therefore, they should be regulated similarly to private foundations.  Treasury appears not to assume donor control; CRS assumes donor control because the DAF sponsoring organizations generally follow donor suggestions.  Clearly, the parties disagree on factual nature this issue - I guess we will see more in Round 2.

Hat tip to my friend Chris Hoyt at the University of Missouri (KC) Law School (you know him... really, really terrible jokes!) for pointing me to the CoF materials.

EWW

 



DISCLOSE Act of 2012 stopped in Senate

According to the Washington Post, Senate Republicans blocked to the DISCLOSE Act of 2012 on a party line procedural vote, which prevented the legislation from moving to the floor for full consideration.

The DISCLOSE Act of 2012 (which stands for the "Democracy Is Strengthened by Casting Light On Spending in Elections Act of 2012’’)* would have required covered organizations to make additional disclosures regarding their political expenditures and their donors.  While the legislation would amend the Federal Election Campaign Act, the definition of a covered organization was mostly drafted in connection to the organization's tax status.  Generally, the expanded disclosures would have covered (1) all corporations (other than 501c3 organizations), (2) all organizations exempt under 501(a)(other than 501c3 organizations), (3) certain labor organizations, and (4) 527 organizations.  (See page 12 of the linked Act) In addition, there were specific provisions addressing affiliated organizations.

EWW

 *(Author's Opinion: really, how much legislative staff time is spent coming up with these not-really-so-witty-anymore acronyms for bills?  Seriously, enough already.)

Yet another restricted gift case....

The NonProfit Times reports that another restricted gift case is winding its way through the courts - now, a trial date has been set in a dispute over land transferred to Johns Hopkins University in a part sale/part gift transaction by Elizabeth Beall Banks (John Timothy Newell, et. al v. Johns Hopkins University).   Miss Banks, who died in 2005, was a land advocate who was concerned about the potential development of her property, known as the Belwar Farm, a 108 acre tract along Interstate 270.   In 1989, she sold the property at a deeply discounted price to Johns Hopkins, subject to the condition that only 30 acres of the land could be developed for  “. . .  agricultural, academic, research and development, delivery of health and medical care and services or related purposes only.”  According to The Washington Post, this language was contained in the two page deed that conveyed the property - it does not appear that there was another gift instrument.   The family contends that the planned science center development is much denser and more commercial than what Miss Banks intended, and is suing have these wishes enforced. 

Is it just me, or are there more of these cases around these days, where a donor's full wishes are not incorporated into the gift instrument but are later asserted as conditions to be respected?  (Garth Brooks, I'm looking at you!)  It would certainly have been possible to draft something that incorporated a current development plan for Belwar Farm or something similar into the terms of the gift instrument - it would seem to me that donors would want the certainty, and that charities would like to stay out of court.  Is it just that UPMIFA's definition of a record - which doesn't include oral representations but does include ancillary marketing material and correspondence - hasn't caught up with these cases or otherwise doesn't apply?  Do we think UPMIFA will help or is this trend (if indeed it is a trend) a side effect of institutions and people scrambling for dollars wherever then can find them in a down economy?  Or is it just bad drafting coupled with charities wanting to maintain as much vagueness as possible?

EWW

 

Russia - New Law Passes Parliament, Goes to Putin for Signature

President Vladimir Putin is expected to sign into law a bill adopted by Russia’s parliament, which labels many foreign-funded, non-governmental organizations operating within the country as “foreign agents.”  The Kremlin has stated that it believes such a bill is appropriate for protecting Russia from external attempts to influence internal politics. The new law has also been given some financial teeth. Human rights activists are already enraged by the legislation, as the Duma also voted to impose fines of up to 5m rubles ($153,000) and a potential two year prison sentence for any organizations or individuals found to be in violation of the new law. Lyudmila Alekseeva, head of the Moscow Helsinki Group, believes that their new ‘foreign agent’ status will force the organization to fold as a result of having to refuse foreign grant money. Alekseeva explains, “The non-wealthy are not used to donating money to non-profit organizations, while the rich fear they may lose their business [by doing so].” In response to his government’s critics, Prime Minister Dmitry Medvedev has assured those affected that state funding will be increased for any NGOs whose activity “as a whole is deemed useful and positive for our country.”  For more see http://www.globalresearch.ca/index.php?context=va&aid=31901. 

KWS

 

China - First National Charity Fair Held in Shenzhen

China’s first ever charity fair was held in Shenzhen on July 13 and 14.  It was hosted by the Ministry of Civil Affairs and the local Shenzhen government.  Attended by over 400 people, the opening ceremony featured a major speech by Minister Li Liguo, which stresses the importance of charity for China’s development. See http://www.chinanpo.gov.cn/1938/55122/index.html.  Another story about the event can be found at http://www.chinanpo.gov.cn/1938/55060/index.html. 

KWS

Has the Tax-exemption Rumble Started in Pennsylvania?

A while ago I posted about a recent Pennsylvania Supreme Court decision on tax exemption that I speculated might reopen the door to property exemption challenges.  The President of the Pittsburgh City Council might have kicked that door open a bit recently.   A story posted on Pittsburgh's public radio station web site notes that city council president Darlene Harris is "investigating whether the city could legally challenge the tax-exempt status of large nonprofits in Pittsburgh."  Harris apparently specifically referred to the recent Pennsylvania Supreme Court decision as grounds for her investigation.

“What some call ‘nonprofit’ is not necessarily all nonprofit,” said Harris. “If you can pay for having commercials during Super Bowls, if you can pay for your name to be on the top of the highest buildings in the City of Pittsburgh… There are doctors that will not see poor people.”

It appears that the City Council is not exactly happy with the PILOT deal struck with a consortium of Pittsburgh nonprofits that we blogged about last week.  The story quotes council budget director Bill Urbanic, who stated “If these were ‘taxable organizations,’ the amount of payroll tax we would receive would be somewhere around $22 million… Also, the real estate, with the new assessment, is probably somewhere between $35 to $50 million.  So, you’re looking at somewhere around $60 to $70 million that we’re forgoing, and what we’re getting instead is $2.6 million annually.”

Has the rumble over property tax exemption started in Pennsylvania?

JDC

 

IRS Inspector General Report Faults EO Complaint Follow-Up

A recent report by the IRS Inspector General found that while the IRS is doing a better job of acknowledging receipt of complaints about EO violations, there are issues with internal controls and tracking of such complaints.   For example, the report found that the IRS couldn't find records of about a quarter of the complaints (31 of 120 cases surveyed from October 1, 2009 through June 17, 2011) and wasn't keeping information updated in its tracking database in a number of other cases.  The report recommended improving internal tracking and review procedures for complaints.

I hope the IRS updates its procedures soon - presidential election years are always high-volume complaint times, and in the wake of Citizens United, this one promises to be a doozy, with (c)(4)'s outspending PACs in the political arena, and some church officials trampling the rules regarding political campaign intervention (e.g., Bishop Jenky of Peoria).  

JDC

 

C(4)'s, Again

Although the story has been blogged elsewhere, I thought it appropriate to note it here as well: the NYT posted a story yesterday about businesses (rather than individuals) donating to 501(c)(4) organizations (and sometimes 501(c)(6)'s, like the Chamber of Commerce) in order to shield their identity.

We've blogged about (c)(4)'s almost too many times to count (do a search if you want to pull these up).  No need to recount the past debate here.  Me, I'd probably just get rid of the (c)(4) designation entirely . . . 

JDC