A Dubious Distinction: Rethinking Tax Treatment of Private Foundations and Public Charities

Virginia Tax Review, Vol. 22, p. 137, 2002

50 Pages Posted: 23 Nov 2010  

Tanya D. Marsh

Wake Forest Law School

Date Written: 2002

Abstract

In this article, Marsh outlines the differences between private foundations and public charities (including community foundations) and the starkly different manner in which the Internal Revenue Service addresses them. She argues that the private/public distinction, a more or less accurate proxy for donor control in 1969 (when the current regulations were drafted), is anachronistic and ill equipped to deal with the rising importance of community foundations and for-profit charitable funds. A new paradigm is necessary to address new entities, especially donor-advised funds and supporting organizations. Finally, she argues that Congress should discard the dubious distinction between private foundations and public charities and replace it with a paradigm based on donor control.

Keywords: philanthropy, public charity, private foundation, tax, community foundation

JEL Classification: K34

Suggested Citation

Marsh, Tanya D., A Dubious Distinction: Rethinking Tax Treatment of Private Foundations and Public Charities (2002). Virginia Tax Review, Vol. 22, p. 137, 2002. Available at SSRN: https://ssrn.com/abstract=1713354

Tanya D. Marsh (Contact Author)

Wake Forest Law School ( email )

P.O. Box 7206
Winston-Salem, NC 27109
United States

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