The Tax Court has declined to take the opportunity to decide whether a “substantial” non-qualifying purpose is sufficient to deny exemption as a 501(c)(4) social welfare organization or whether the non-qualifying activity must be the “primary” activity of the organization.
James Batmasian, a self-described person of extraordinary wealth with a history of substantial charitable giving, claimed that his 2008 conviction for failure to pay federal withholding taxes has caused “exceptional difficulties and hardships” to his “pioneering philanthropic endeavors” and his “desire to be proactive” with charity.
The Pennsylvania Commonwealth Court has upheld the determination by the Department of State that a for-profit company that operates a portable amusement park providing rides, games and food for carnivals and pays a percentage of the ride fees to charities and other nonprofits is a “professional solicitor” that must register under the state’s charitable solicitation registration act. It has upheld a cease and desist order prohibiting the company from running its carnivals within the state without registering as a solicitor.
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.
