Lead Stories

The Tax Court has upheld an IRS ruling denying a charitable estate tax deduction for the value of the remainder interest of an attempted charitable remainder annuity trust when the stated annuity payment did not meet the statutory requirements for a CRAT.  It has held that the trustees had no unilateral power to amend the instrument and had failed to obtain a necessary court reformation.

Talk about a double whammy.

The Court of Appeals of Minnesota has affirmed a trial court decision removing one of the trustees of the Otto Bremer Trust, a $2 billion private foundation in St. Paul, for “serious breach of trust” under state law.  The Attorney General had petitioned for the removal of all three of the Foundation’s trustees, but the trial court granted the petition only as to one of the group.  The removed trustee appealed and the Court of Appeals has affirmed.

The Supreme Court of Washington has dismissed a group of claims brought by the state for violation of state consumer protection law by a for-profit thrift store operator that advertised its payments to “charity partners” for contributions to the thrift store operation.  The Court has refused to apply the standard for liability usually applicable to “commercial” speech to determine whether a fraud had occurred and found that the claims do not survive the “strict scrutiny” applied to charitable solicitation.

A Pennsylvania appellate court has denied charitable real estate tax exemption for four hospitals in a reginal nonprofit hospital system on the ground that they did not qualify under the state’s definition of “charitable.”  It affirmed three decisions from one county and reversed a decision from another.

The state Commonwealth Court has found that four hospitals in the Tower Health system in suburban Philadelphia did not operate free from private profit motive and did not provide a sufficient amount of below cost care to its patients.

Title VII of the Civil Rights Act prohibiting workplace discrimination specifically exempts a “bona fide membership club” that is federally tax-exempt under section 501(c). 

A federal District Court in Pennsylvania has recently decided that the Centre Hills Country Club in State College PA meets the definition and is exempt from the rules.  It has dismissed on summary judgment a claim brought by a female former employee.