Exemption Books

Don't waste your time with the other books that only hint on what to do...this book provides the details that allows you create a solid "estate plan" that is proven.

Unlike other books out there, this book written by an attorney, not from a convicted tax evader who is selling his newest scam.

As a legal advisor to a Section 501(c)(3) hospital who is not a dyed-in-the-wool tax expert, I have found this book to be of immense help. It is well-written and the examples are chosen carefully.

Again, Eleanor Brilliant gives us a no-nonsense look at American charitable enterprise and the people who run it. As events and actions of leaders give frequent rise to questions about the caliber and integrity of Americans' non-profit way of serving others, she provides a well-researched analysis of information that people who give their time and money ought to know. Since most don't, the leaders of the agencies to whom they give ought to read this excellent work to become familiar with information important to their constituents.

The subject of property tax exemptions for charities may not on first impression seem like the most burning issue of the day. However, the topic involves several elements that provoke the passion if not the ire of any number of people: taxes, property rights, politics, discrimination, and religion. A list of subjects not to raise at cocktail parties would not contain too many additional entries.

Legal theories notwithstanding, property taxes begin with the simple practicality that real property is impossible to hide and easy to confiscate. Regardless of the owner's asset liquidity, property taxes invoke the Willie Sutton theory of taxation: that's where the money is.

Legal theories notwithstanding, property tax exemptions have at their origin the fact that activities that we consider as charitable, schools, hospitals, welfare, etc., were the almost exclusive province of the medieval church. The church could not be taxed because the crown would risk excommunication or interdiction. In the Middle Ages, in contrast to today, going to hell was something to be feared rather than encouraged.

We learn from this that property taxes are inevitable and exemptions are eternal if not immutable. Old habits are difficult to break.

Evelyn Brody, the editor of this book, is professor of law at Chicago-Kent College of Law, Illinois Institute of Technology and an associate scholar with the Urban Land Institute's Center on Nonprofits and Philanthropy. She and her contributors do a uniformly good job of placing the issues in context.

The historical perspectives were valuable, particularly a chronology showing how history and taxes interrelate. Other chapters include discussions of legal theories of taxation and exemptions, alternative methods, and the conflict between tax-exempt organizations and municipalities.

If the book has a deficiency it is that the scope constrains itself to, as the subtitle indicates, mapping the battlefield rather than preparing for battle. I should have liked to see more material on the relationship between property taxes and property use.

All in all, the book is definitely a successful example of thorough research and excellent analysis of that research. I await the sequel.

This is an excellent a succinct and cogent analysis of an issue, that while obscure, has an impact on millions of Americans. Romer was the leading advocate for human service organizations in the 1980s and his writing addresses the key aspects of the House Ways and Means oversight hearings that were held over 20 years ago. Congress is about to revisit the basis on which nonprofit organizations have been granted their tax exempt status. They would be well advised to read this article that will give them a helpful historical perspective on this subject.

"Writing Off Ideas" is Randall Holcombe's examination of the role charitable foundations play in shaping public policy in a free society. In it, he explores issues like donor intent and whether institutional incentives exist to ensure that foundation board members are held accountable for their actions.

He begins by pointing out that the vast majority of charitable foundations in the twentieth century were established under very general mandates to promote the public interest. He claims this approach enables board members to address unique problems in society as they occur and prevents their current leadership from being constrained by the desires of their original donors. As foundations are funded entirely by earnings from initial bequests, he believes their board members are essentially free from external oversight and accountable to no one. Thus, he implies that the merits of many programs supported by foundations can be called into question.

In addition, he states that the tax code exacerbates this problem by encouraging wealthy individuals to make large bequests to foundations to avoid inheritance tax penalties. As a result, he claims far more foundations exist under the current tax code than would be necessary under a neutral code.

To illustrate the moral hazard inherent in this arrangement, he provides a revealing quote from former MacArthur trustee Rod MacArthur: "Foundations should be striving to do the kinds of things that the government cannot do. I repeat, cannot do: things that are not politically popular, things that are too risky, things that are just too far ahead to what the public will put up with..."

Predictably, Holcombe uses the legendary exploits of the Ford Foundation during the 1960s as examples of how some boards run amok. However, his criticisms are not restricted to the Left. Surprisingly, he attacks the Manhattan Institute for using foundation money to underwrite the efforts of Charles Murray in "Losing Ground." Although he does not question Murray's conclusions about the proper role of government in domestic welfare policy, he does criticize Murray for claiming that the availability of foundation funding was a motivating factor in his decision to write the book.

In criticizing Murray, he runs the risk of sounding like Elizabeth Drew and other advocates of campaign-finance reform. He walks a very fine line between claiming that individuals who receive tax-deductible funds to promote their views should be subjected to greater scrutiny than those who do not, and claiming that funding used to promote political views should only be distributed via democratic decree. However, as with other forms of political speech, he asserts that members of the public are already well aware of the bias inherent in foundation funding and stops well short of advocating limitations on foundation-sponsored research.

Despite these problems, he asserts that the public expects three things from foundation managers: that they do not use their assets for their own personal gain, that they carry out the mission established by their donors, and that their activities generally benefit members of the public. In his conclusion, he states that the current limitations imposed by Congress on foundation activities have forced their managers to comply with these expectations. Although he does not believe that all foundation activities actually serve the public interest, he recognizes that efforts by bureaucrats to further regulate foundations would have unintended consequences. Ultimately, accusations of political bias should not derail important contributions to the policy debate.

Overall, Holcombe does an excellent job of explaining why foundation trustees face strong incentives to promote radical political agendas that can be harmful to the public interest. He demonstrates an acute understanding of public choice economics when documenting the moral hazards faced by managers of foundations. Most importantly, he recognizes that efforts to stamp out the "bad ideas" produced by these managers would do more harm than good.

I bought Jody Blazek's "IRS Form 1023 Tax Preparation Guide" to help me through the maze of filling out the recently-revised applicaiton form for obtaining 501(c)(3) tax exempt status. It was a very helpful book. I kept it by my side when filling out the form, and emulated the examples it gave.

When I was nearing completion, I considered having my applicaiton reviewed by a CPA in a big city near hear, just to make sure there was nothing in my final draft that might cause rejection or delay. In the final analysis, I decided just to submit what I had done with the help of Jody's book -- and save the $500 to $1,000 that the CPA firm in Buffalo would have charged.

I submitted our application for the VIA Collaborative Arts Corporation (DBA VIA Dance Collaborative) on September 1, 2005. The IRS issued our approval letter -- our "Letter of Determination" on September 30. Need I say more?

This book answered many questions that the instructions provided with form 1023 does not. We hope to get a merit ruling.

It's hardly the most sexy book I've reviewed, but it may be among the most useful if you are involved with a US nonprofit organization, or know someone who is. 990 Handbook is a line-by-line approach to the annual IRS Form 990.

Written by Jody Blazek, the book is a self-contained soup-to-nuts guide to completing these annual forms correctly.

Blazek accomplishes what she set out to do, as stated in the book's Preface: "My goal for this handbook is to demystify the Forms 990 for financial professionals and nonprofessionals alike - to make it easy for a nonprofit organization to achieve the best possible presentation of their financial activity and mission accomplishments for all to see."

As a lawyer who focuses on the law of tax-exempt organizations, one of my least favorite tasks is to prepare these annual forms. This handbook just made my life easier, and likely will result in a better result for my clients.

This book comes with a hefty price - I was hesitant. If you are considering the establishment of your own private foundation, this book is a must. It is fairly heavy with the legaleze, but required when considering the thorough discussions of establishing and maintaining a foundation with respect to the applicable IRS tax code. Each topic is documented and sample tax forms are illustrated. Highly recommended - needs to be a little more user friendly for the 5th star.

This book is an excellent tool to know more about the tax procedure in the USA, specially for non-profit organizations.