Associations lack standing to sue Harvard Law Review
The Faculty, Alumni and Students Opposed to Racial Preferences and the Coalition for Meritocracy at Universities, two unincorporated nonprofit associations organized in Texas with no direct connection with Harvard University, have no standing to sue Harvard and the Harvard Law Review for allegedly discriminatory practices in selecting students to run the prestigious publication. A federal District Court in Massachusetts has dismissed the claims both for lack of standing and for failure to state a claim.
When may corporate counsel not represent corporation?
When the corporation is the nominal plaintiff in a derivative action and the counsel has a sense of loyalty to the officers and directors who are charged with wrongdoing.
Court rejects IRS definition of “educational institution”
A federal District Court in Minnesota has rejected the IRS definition of an “educational institution” and allowed the Mayo Clinic to recover more than $11.5 million in unrelated business income tax. It has held that the IRS definition is too narrow and is not authorized by the Tax Code.
The IRS assessed taxes in 2009 for unrelated business income received by Mayo from certain activities conducted through partnerships. Mayo paid the taxes and sued for a refund.
The Lawyer on the Board: Playing a Dual Role
Both parties should understand the ethical limitations on the attorney’s conduct when wearing two hats in board deliberations.
None of these situations is insurmountable so long as both the lawyer and the other members of the board understand the issues. The key is acknowledging the issues before they arise, so that nobody will be surprised and neither the lawyer nor the organization will be put at risk.
A lawyer serving on the board of a nonprofit should have a serious discussion with the other members of the board about their mutual expectations for service. The lawyer may face ethical issues which could come as a surprise to everyone if not faced in advance. The lawyer and the organization should consider whether the benefits outweigh the risks of dual service.
Federal Court Blocks IRS Effort To Suspend Requirement for Schedule B
Says action cannot be taken without following rulemaking provisions of Administrative Procedure Act
A federal District Court in Montana has put at least a temporary hold on the Internal Revenue Service’s effort to suspend the requirement for tax-exempt organizations to file a list of their significant donors on Schedule B to the Form 990 tax information return. The Administration had eliminated the requirement for all exempt organizations except 501(c)(3) public charities by publishing a new Revenue Procedure in 2018. (Rev. Proc.