Court Affirms Trial Court Decision Denying Termination of Charitable Trust

Decision was within discretion to determine that burdens were not “unreasonably out of proportion to the charitable benefits”

The Pennsylvania Supreme Court has affirmed a decision by a state trial court holding that a charitable trust providing support of Virginia Military Institute should not be terminated because the additional burdens of operating as a separate private foundation were not “unreasonably out of proportion to the charitable benefits” of the trust.

Foundation not entitled to attorneys’ fees

A private foundation in Pittsburgh that successfully fought off a challenge by the founder’s grandchildren to the composition of its board has been denied a claim to recover attorneys’ fees and costs that it said totaled nearly $1.5 million.

Buckeye Schedule B case certified for appeal

The Buckeye Institute case seeking to rid charities of the obligation to complete Schedule B disclosing substantial donors on the annual Form 990 tax information return has been certified for appeal to the federal Court of Appeals.  The District Court in Ohio hearing the case has certified the case for an interlocutory appeal.

Private Operating Foundations Are Hybrids

Organizations which are not publicly supported but use most of their assets and income in the active conduct of their charitable activities avoid some private foundation limitations.

Most charities exempt under Section 501(c)(3) of the Tax Code are classified either as publicly supported organizations, including churches, schools, hospitals, social service or healthcare organizations and cultural groups, or as private foundations, which are usually endowments making grants to other charities. Private foundations must function under significantly more stringent limitations, and organizations would usually rather qualify as publicly supported.

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Tax compliance officer fired for non-compliance

An IRS tax compliance officer has been fired for her personal non-compliance with the tax law.  The U.S. Court of Appeals for the Federal Circuit has affirmed the decision of the Merit Systems Protection Board, which affirmed the decision of an administrative law judge, who affirmed the agency’s decision to terminate her employment.