Election year 2016 has something for everyone, including tax-exempt law practitioners. Along with the discussion of Russian hackers and pocket Constitutions have been charges against the Trump and Clinton Foundations involving whether either has violated the laws regarding their tax-exempt status. Many of the charges against both Foundations no doubt are politically motivated and have political and other legal (non-tax) ramifications. Those issues have been well-covered by the media over the past 12 – 18 months. The focus of this article will be on the implications of the allegations, if true, on the Foundations’ tax-exempt status.1Continue reading
Reynolds Cafferata was one of the members of the legal team honored with a Clay Award from the Daily Journal and callawyer.com for ground-breaking legal work in the Estate of Duke.
In the Estate of Duke, the California Supreme Court held that a will with unambiguous terms can be reformed to reflect the testator’s true intentions. The decision reversed decades-old precedents and hundreds of years of common law. A cardinal rule of interpreting a person’s will was that if the language of the will was clear on its face, no matter what evidence was produced that showed that the will did not follow the decedent’s intentions, the terms of the will could not be altered.Continue reading
A discussion that occurs at nearly every board meeting (not to mention audit, grants and finance/investment committee meetings) of a private foundation is whether the investments and grants for the year can be “managed” to reduce the excise tax on net investment income to 1 percent. Since the enactment of the Tax Reform Act of 1969, when the tax on net investment income was first introduced, the rate of tax has been 2 percent which could be reduced to 1 percent if the percentage of the current year’s charitable spending exceeded the average of the prior 5 years’ spending.Continue reading