IRS Not Grossly Negligent In Disclosure Of Exempt Application
Citizens Awareness Project actually does look like an entity that was set up to game the lack of transparency permitted to organizations exempt under 501(c)(4). According to its initial Form 990 for the year 2012 it received $2,535,000. It had no paid staff or occupancy expenses. Pretty much the whole $2.5 million went to two vendors. The $993,916.79 noted above to Stephen Clouse & Asooc and $1,449,952.10 to Direct Response LLC in Phoenix Arizona. The latter was to conduct research to measure the “current opinions of specific demographic groups and how such groups change over time”.
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.
Follow Me
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.