The Law of Tax-Exempt Healthcare Organizations. Bruce R. Hopkins

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Название The Law of Tax-Exempt Healthcare Organizations
Автор произведения Bruce R. Hopkins
Жанр Личностный рост
Серия
Издательство Личностный рост
Год выпуска 0
isbn 9781119639077



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IRS determined that the entity was not organized and operated exclusively for charitable purposes under the Code. To satisfy the organizational test, an organization must limit its purposes to those set forth in the Code for charitable organizations, and they must not expressly empower the organization to substantially engage in activities that are not in furtherance of those purposes. In applying the law, the IRS stated that the common law of trusts specifies that a charitable trust cannot be created for an illegal purpose and that like a trust, a charitable organization cannot be created for a purpose that is illegal.125 Accordingly, because federal law prohibits the use of cannabis under these circumstances, the IRS determined that the organization does not satisfy the organizational test in that its purposes are illegal and contrary to public policy.

      1 79.1 80 Fed. Reg. 4791 (Jan. 29, 2015).

      2 79.2 IRC § 501(c)(29).

      3 79.3 Reg. § 1.501(c)(29)‐1(b).

      4 *79.4 Rev. Proc. 2019‐5, 2019‐1 I.R.B. 230 § 4.02(7)(a)(i).

      5 114 Priv. Ltr. Rul. 201615022.

      6 115 Better Business Bureau of Washington, D.C. v. United States, 326 U.S. 279, 283 (1945). See § 4.6, text accompanied by note 218.

      7 116 See Rev. Rul. 85‐2, 1985‐1 C.B. 178.

      8 117 See Reg. § 1.501(c)(3)–1(d)(2).

      9 118 See Institute for Healthcare Improvement Triple Aim Initiative, www.ihi.org/engage/initiatives/tripleaim.

      10 119 Rev. Rul. 86‐98, 1986‐2 C.B. 74.

      11 120 IRS Notice 2011‐20, 2011‐16 I.R.B. 652.

      12 121 See https://www.governing.com/gov-data/safety-justice/state-marijuana-laws-map-medical-recreational.html.

      13 122 21 U.S.C. § 812. Federal law prohibits the manufacture, distribution, possession, or dispensing of a controlled substance. 21 U.S.C. § 841(a). Congress has “made a determination that marijuana has no medical benefits worthy of an exception” to the general rule that the manufacture and distribution of cannabis is illegal. United States v. Oakland Cannabis Buyers' Co‐op., 532 U.S. 483, 493 (2001).

      14 123 THC is the acronym for tetrahydrocannabinol, the chief intoxicant in marijuana. CBD is the acronym for cannabidiol, a nonintoxicating cannabinoid found in cannabis and hemp.

      15 124 Priv. Ltr. Rul. 201917008.

      16 125 Rev. Rul. 75‐384, 1975‐2 C.B. 204; Mysteryboy, Inc. v. Comm'r, 99 T.C.M. 1057 (2010).

      17 126 Priv. Ltr. Rul.201940008.

      18 127 For a discussion of the unrelated business taxable income issues that arise in medical marijuana dispensary cases, see § 24.23 (c)(x).

      1  § 16.3 Attribution of Subsidiary's Activities to Exempt Parent

       p. 367, note 81. Insert as third paragraph:

      Likewise, an organization was denied recognition of exemption as a charitable entity in part because it was found by the IRS to be “virtually indistinguishable” from a for‐profit company; the two entities were said to be marketing the same program, have similar names, and share a website (Priv. Ltr. Rul. 201714031).

       p. 387, second complete paragraph. Insert as last sentence: