Law Commons^™

Is There Theoretical Justification For Payments In Lieu Of Taxes?, Darryll K. Jones

Darryll K Jones

Payments in lieu of taxes (PILOTs) are said to be voluntary payments from tax exempt entities to local government. To call such payments “voluntary,” though, is essentially to indulge a legal fiction that allows us to avoid the implication that the public may ultimately think it unfair and a sure waste of money to exempt certain revenue generating entities from taxation. Ultimately, given the implicit threats usually accompanying requests for payments in lieu of taxes, PILOTs are voluntary only in the sense that taxes, themselves, are voluntary. This article suggests that when local government officials ask charities to make PILOTs …

Charity And Information: Correcting The Failure Of A Disjunctive Social Norm, Brian Broughman, Robert Cooter

University of Michigan Journal of Law Reform

Charitable donations fund social goods that the state and markets undersupply. Despite widespread belief in the importance of private charity, most Americans donate little or nothing. Experiments in behavioral economics show that anonymity, not human nature, causes low contributions. Anonymity poses a particular challenge for charity because of the special character of the obligation. Charity is a disjunctive social norm, meaning the obligation is owed to "A or B or C or ...". Disclosure of each individual's aggregate conduct is necessary for the effectiveness of any disjunctive social norm. To revitalize charity we propose a public registry where each taxpayer …

The Problems With Donor Intent: Interpretation, Enforcement, And Doing The Right Thing, Susan N. Gary

Chicago-Kent Law Review

In a number of recent controversies, the way the charities involved handled restricted gifts resulted in unhappy donors, negative publicity, and costly litigation. This paper examines several of these cases and then argues that donor intent is often more difficult to divine that many people have stated.

The law requires that a charity give effect to a restriction imposed by a donor. This paper examines the legal rules that govern donor-restricted gifts and considers the other reasons a charity will, in most cases, follow the donor's intent. The paper then describes several circumstances in which donor intent may not be …

Comparing The Treatment Of Charities Under Vat And Rst, Walter Hellerstein

Presentations and Speeches

Good VAT = Good RST

Desire to assist charities should be addressed outside the RST to avoid revenue losses and administrative complexity and to maintain fiscal neutrality

Assistance should be provided by other means such as direct subsidies

Charitable Waste: Consideration Of A "Waste Not, Want Not" Tax, Evelyn Lewis

Evelyn A Lewis

CHARITABLE WASTE: CONSIDERATION OF A “WASTE NOT, WANT NOT” TAX EVELYN A. LEWIS Abstract Lavish expenditures by charities occur regularly, even in today’s depressed economy. Many are unwarranted and foolish while some prove to be extremely beneficial and valuable over time. But even the best of charitable splurges involve government waste since all charities are substantially supported by significant government subsidies. Unfortunately, most taxpayers don’t respond to charitable luxury-type waste with the same degree of outrage they do to other forms of government waste. This article first reveals the probable reasons for this different taxpayer reaction and posits that it’ll …

The Multiple Common Law Roots Of Charitable Immunity: An Essay In Honor Of Richard Epstein's Contributions To Tort Law, Jill R. Horwitz

Articles

Professor Epstein has long promoted replacing tort-based malpractice law with a new regime based on contracts. In Mortal Peril, he grounded his normative arguments in favor of such a shift in the positive, doctrinal history of charitable immunity law. In this essay, in three parts, I critique Professor Epstein’s suggestion that a faulty set of interpretations in charitable immunity law led to our current reliance on tort for malpractice claims. First, I offer an alternative interpretation to Professor Epstein’s claim that one group of 19th and early 20th century cases demonstrates a misguided effort to protect donor wishes. Rather, I …

The Fatal Design Defects Of L3cs, Daniel S. Kleinberger

Faculty Scholarship

This article argues that the L3C is an unnecessary and unwise contrivance, and it's very existence is inherently misleading. The notion that an L3C should have privileged status under the Internal Revenue Code (known as the Code) for access to tax-exempt foundation resources is inescapably at odds with the key policies that underpin the relevant Code sections, and L3Cs are not on track-let alone on a fast track-to receive special status under the Code. An ordinary limited liability company (LLC) can perform precisely the same functions proclaimed of L3Cs. In addition, because of technical flaws, the L3C legislation adopted to …

The Attack On Nonprofit Status: A Charitable Assessment, James R. Hines Jr., Jill R. Horwitz, Austin Nichols

Articles

American nonprofit organizations receive favorable tax treatment, including tax exemptions and tax-deductibility of contributions, in return for their devotion to charitable purposes and restrictions not to distribute profits. Recent efforts to extend some or all of these tax benefits to for-profit companies making social investments, including the creation of the new hybrid nonprofit/for-profit company form known as the Low-Profit Limited Liability Company, threaten to undermine the vitality of the nonprofit sector and the integrity of the tax system. Reform advocates maintain that the ability to compensate executives based on performance and to distribute profits when attractive investment opportunities are scarce …