Religious Arbitration Clause Does Not Hurt Million Plus Gift Tax Exclusion
The IRS argues that the withdrawal rights were not “legally enforceable”. IRS starts out “hypothesizing that the trustees might refuse, without legal basis, to honor a timely withdrawal demand”. It admits that this an adverse ruling by the Ben Din could be appealed to state courts, even though the courts don’t like to upset arbitration decisions. The sense is that the “No soup for you” clause would scare them.
The Tax Court read the trust more closely and thought that the “ad terrorem” clause was much more limited. Basically, it was there to emphasize the trustee’s broad discretion to make distribution and would only be triggered if a beneficiary brought a suit that challenged an actual distribution to another beneficiary. Therefore the beneficiary did have an enforceable right to demand a distribution during the Crummey window. As with any upholding of Crummey powers, the fact that it appears that beneficiaries never do that, as far as anybody I have ever heard of knows, is not relevant.
Gallery Does Not Get Exempt Status And The Lusty Month Of May
You are similar to the organization described in Revenue Ruling 71-395. You were formed by a group of artists and are operating an art gallery open to the general public which displays and sells members’ artwork. One advantage of membership is listed as the ability to show works. In addition, like the organization in the revenue ruling, a committee consisting of artist members selects works that will be displayed and offered for sale. Additional members are admitted to membership by approval of the existing members. Your gallery is open free to the public on certain days and by appointment on others. Nearly all work is for sale, and you retain a commission of the original sales price of artwork that is sold. Consequently, like the organization in the revenue ruling, you are a vehicle for advancing members’ careers and are promoting the sale of members’ artwork. This serves the private purposes of your members, even though the exhibition of art may be an educational activity in other respects.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.