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Passive-Aggressive Regulation

One of the worst things that could happen to a charity's in-house lawyer would be the loss of his organization's tax-exempt status during his watch. It would be like a NASCAR driver running out of gas mid-race. You don't want it to happen to you.

Fortunately, the law about how to keep that tax exemption has stayed pretty consistent. All you have to do is make sure your organization is "organized and operated exclusively" for exempt purposes--understanding, of course, that "exclusively" really means "primarily." This is the language of the Tax Code and it provides much-needed wiggle room to accommodate the wide range of activities that could constitute an exempt purpose. These are the words Congress used, and, as such, they are our ultimate authority.


Bruce D. Collins

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