• Charities and Governance: Is the IRS Subject to Challenge?
  • March 11, 2009 | Author: Marcus Sherman Owens
  • Law Firm: Caplin & Drysdale, Chartered - Washington Office
  • The following discussion is intended to explore ramifications of the role the IRS is assuming regarding charities and governance. As such, it highlights the inherent tension between a system of rules drawn from, and limited by, the explicit terms of the authorizing statute, the Internal Revenue Code of 1986, and an oversight system deriving its authority from equity and the common law. The intention is not to examine the desirability of "good governance" in a charity, or whether the IRS has identified appropriate indicators of that behavior, but rather to examine the nature of the Service's authority to demand, under the threat of civil and criminal sanctions, information about a given charity's governance practices and whether the IRS assumption of that authority can be effectively challenged.