The Law of Tax-Exempt Organizations, 10th Edition 2014 Cumulative Supplement

CHAPTER FIVE

Nonprofit Governance

§ 5.7 IRS and Governance

(b) IRS Ruling Policy

*(f) Governance Check Sheet

*p. 120, n. 31. Insert following existing text:

On another occasion, the Tax Court wrote, in connection with denial of tax exemption to an organization, that the entity “has not adopted an operating structure or procedures necessary to ensure that its activities are properly focused to further its alleged charitable purpose,” adding that “prominent” among these “shortcomings” is the “lack of a formal business plan and an independent board of directors to provide operational guidance and oversight” (The Council for Education v. Comm'r, T.C. Memo. 2013-283 (2013)).

§ 5.7 IRS AND GOVERNANCE

p. 140. Insert following first complete paragraph, before heading:

Controversy abounds as to whether the IRS should be so heavily involved in the governance of public charities and other categories of tax-exempt organizations in terms of priorities, competence, and jurisdiction. As to the latter two elements, a Supreme Court justice wrote, in a concurring opinion, that the “business” of the IRS is to “administer laws designed to produce revenue for the Government, not to promote ‘public policy.’”^105.1 Some would add: “and not to promote nonprofit governance.”^105.2

This justice added: “This Court often has expressed concern that the scope of an agency's authorization be limited to those areas in which the agency fairly may be said to have expertise.”^105.3 The Court wrote that “an agency's ...