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IRS Tea Party “Scandal” Shows Need for (c)(4) Definition

Evidence shows workers struggling to define limits, not Administration effort to target political foes

Despite the political grandstanding that erupted after the disclosure that IRS determinations staff and attorneys had asked some improper questions of Tea Party and other potentially political organizations applying for 501(c)(4) social welfare exempt status, there has been no evidence that the IRS or the Obama Administration was targeting political foes. 

When one reads the Treasury Inspector General’s Report, press reports of staff statements to the House Committee on Oversight and Government Reform, and comments of former IRS officials, one comes away with a vision of front line staff struggling to try to determine who can qualify as a (c)(4)...

IRS Requires Substantiation of Contributions

Donors must obtain acknowledgment from charity for gifts worth $250 or more, must file Form 8283 for gifts of property over $500, with appraisal over $5,000

It isn’t as easy as it once was to claim a charitable contribution deduction for a gift to charity.

Because of perceived abuses by taxpayers claiming inflated deductions without adequate justification, Congress and the Internal Revenue Service have tightened the rules over the last several decades.  

The rules apply to the taxpayers seeking the deduction.  In most cases, they do not directly apply to the charities receiving the gifts and do not impose penalties on charities, but charities that want to assist their donors and receive additional gifts will want to be sure that the donors are in position...

Directors Often Fear Risks of Personal Liability

Board members face potential liability for their own actions in causing injury to others, or in breaching a fiduciary duty to the organization.

Although board members can cut the risk of personal liability by conforming their conduct to the appropriate standards, they cannot control whether or not they will be sued. Therefore, they should be sure that the organization maintains proper insurance to protect them against foreseeable hazards, including general liability coverage, professional liability coverage where appropriate, and directors and officers liability insurance.


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