Abstract

http://ssrn.com/abstract=2215181
 


 



Globalism, Public Policy, and Tax-Exempt Status: Are U.S. Charities Adrift at Sea?


Nicholas A. Mirkay III


Creighton University - School of Law

February 11, 2013

North Carolina Law Review, Vol. 91, No. 3, 2013

Abstract:     
This article wrestles with whether charitable organizations’ international activities can or should impact such organizations’ domestic tax exemption. It addresses the issues raised by such international activities — if those activities contravene current U.S. foreign policy or international law is a charity’s tax-exempt status adversely affected? Does such contravention implicate the public policy doctrine? On one hand, this article agrees with other legal scholars that the public policy doctrine needs congressional attention, including some codification of the doctrine to provide legislative boundaries and ensure against arbitrary and capricious application by the Internal Revenue Service (“IRS”). On the other hand, this article contends that the automatic inclusion of U.S. foreign policy and international law as components of “established public policy” would be administratively impracticable and onerous and would result in significant compliance difficulties for charitable organizations. Considering all these challenges, this article nevertheless proposes that some codification of the public policy doctrine accompanied by a listed transaction scheme, similar to those employed in other areas of the Internal Revenue Code (“Code”), could provide Congress and ultimately the IRS with the ability to target certain international activities as inherently in conflict with tax-exempt status. In addition, this article proposes that the codification of the public policy doctrine should include an excise tax regime, as an alternative to revocation, to address isolated or small violations of the public policy doctrine in relation to a charitable organization’s overall tax-exempt activities. Although these proposals are not without pitfalls and criticisms, they will nevertheless provide practical guidance to charitable organizations, thereby aiding compliance and ensuring uniform treatment of charitable organizations with international activities or operations.

Number of Pages in PDF File: 37

Keywords: nonprofit, tax-exempt, charities, charitable organizations, public policy doctrine, Bob Jones University

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Date posted: February 11, 2013  

Suggested Citation

Mirkay, Nicholas A., Globalism, Public Policy, and Tax-Exempt Status: Are U.S. Charities Adrift at Sea? (February 11, 2013). North Carolina Law Review, Vol. 91, No. 3, 2013. Available at SSRN: http://ssrn.com/abstract=2215181

Contact Information

Nicholas A. Mirkay III (Contact Author)
Creighton University - School of Law ( email )
2500 California Plaza
Omaha, NE 68178
United States
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