VMI Can’t Force Termination Of Charitable Trust for Its Benefit
Pa. Court says potential cost savings do not overcome paramount intent of donor to keep assets in separate trust
The Superior Court of Pennsylvania, an intermediate appellate court, has affirmed a trial court decision and denied a request of the Virginia Military Institute to terminate a $2 million trust for its benefit and transfer the assets to its affiliated foundation outright. In what it called a case of first impression, the Court upheld the position of the trustee bank and the state attorney general that the donor had intended to keep the assets separate from the institution and a difference in cost was not sufficient to deviate from that intent.
Failure to follow governing documents voids action
What happens when members of a condo association fail to follow their governing documents in changing the rules for their association? An appellate court in Illinois has affirmed a trial court decision that the action is illegal and void and the association may not enforce its claims against some other members of the association.
E.D. can’t deduct travel costs as business expense
The executive director of a small U.S. nonprofit cannot deduct travel expenses to support his activities on the board of a separate unrelated Brazilian nonprofit, the Tax Court has ruled. The executive claimed that there was “no question” his activities advanced the interests of the U.S. nonprofit. The Tax Court said: “As we see the matter, there are some questions about it.”
DAF Donor Lacks Standing To Sue Over Excessive Fees
Court of Appeals affirms trial court decision dismissing case against Schwab Charitable Fund
The Ninth Circuit Court of Appeals has affirmed a trial court decision dismissing a suit by the creator of a donor advised fund who sought reputational and other damages on the ground that the sponsor of the DAF paid excessive fees for managing the investments and deprived him of funds to distribute to other charities. (See Nonprofit Issues® Vol. XXXI No.
IRS releases new technical guide for trade associations
The Internal Revenue Services has recently released a new Technical Guide for 501(c)(6) trade associations and business leagues. The IRS says it updates the existing Audit Technique Guide available on its website.
The fine print says it is “not an official pronouncement of the law or the position of the Service and cannot be used, cited, or relied upon as such.” But it also says it is up to date as of its revision date, 9/16/22.