Joint Ventures Involving Tax-Exempt Organizations, 4th Edition

CHAPTER 5Private Benefit, Private Inurement, and Excess Benefit Transactions

1. § 5.1 What Are Private Inurement and Private Benefit? (Revised)
2. § 5.2 Transactions in Which Private Benefit or Inurement May Occur
3. § 5.3 Profit-Making Activities as Indicia of Nonexempt Purpose
4. § 5.4 Intermediate Sanctions (Revised)
5. § 5.7 State Activity with Respect to Insider Transactions

§ 5.1 WHAT ARE PRIVATE INUREMENT AND PRIVATE BENEFIT? (REVISED)

(a) Introduction

p. 409. Delete of the Internal Revenue Service Code (“the Code”), Internal Revenue Service, and the parentheses around IRS in the first paragraph.

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In 2019 there were some major news stories involving tax-exempt organizations. One involved the National Rifle Association, an IRC section 501(c)(4) organization, and its related foundation, an IRC section 501(c)(3) organization. Reported allegations include claims that the NRA's CEO, Wayne La Pierre, spent approximately $274,000 over a 13-year period on clothing purchased from designer boutiques through an arrangement with the NRA's advertising agency, Ackerman McQueen, and that he also charged alleged lavish vacations through a credit card from the agency, which then submitted for reimbursement from the NRA. In addition, there are claims that the NRA made $185,000 in undisclosed donations to a charity run by Mr. LaPierre's wife, whose exempt purposes are unrelated to the NRA's mission.

In addition, accusations of impropriety ...