Utah Attorney General Backs Off from Attack on Bowl Champion Series
The Utah Attorney General has backed away this fall from his threatened legal attack on the Bowl Championship Series (“BCS”) for college football. For months after the University of Utah fell short of a BCS berth, the Attorney General rattled the saber of an antitrust suit, publicly advertising (twice) for lawyers to sue, recruiting other plaintiffs, and threatening to file suit imminently. In an apparently coordinated maneuver, last year, Senator Orrin Hatch (R. Utah) and others persuaded the Obama administration’s Justice Department to send a letter to the NCAA president inquiring into why the BCS lacked a playoff feature. After… Read more
Low Income Housing Organization Cannot Claim Tax Exemption from Property Taxes during Organizational Phase
A Georgia low income housing organization, recently lost its bid for property tax exemption for the years before the organization’s facility actually opened. Last month, the Georgia Court of Appeals held that the exemption did not apply to the start-up phase, during which the organization was obtaining financing, constructing and renovating. According to the Court, the organization can claim exemption only when the organization is actually providing charitable services — in this case housing tenants. What This Case Teaches: When setting up a charitable venture, find a way to begin serving the target population early in order to obtain exemption… Read more
Standard-Setting Organization for Mobile Phones Fails in Bid for Early Dismissal from Antitrust Suit
Cell phones emit signals that enable cell towers to know where a particular cell phone is located. (Recently, wanted software founder John McAfee was reportedly located in Guatemala through that the use of that technology. Divorce detectives have started using it, too.) A company selling that technology sued mobile phone manufacturers for using their positions of authority in the industry standard setting organization to exclude that company’s technology. The company also sued the organization. This fall, the federal district court denied the organization’s motion to dismiss the lawsuit, allowing the lawsuit to move forward. It did not matter, the court said, that the organization itself did not know about the alleged malfeasance of the committee chairmen. It also did not matter… Read more
Pooled-Asset Special Needs Trust Does Not Qualify as Tax-Exempt
Lawyers can set up special needs trusts for the benefit of disabled and elderly persons. Assets in such a trust do not count against the beneficiary’s assets in qualifying for Medicaid. A lawyer in Massachusetts organized a pooled-asset trust to combine the assets of more than 300 such trusts. He was the president, treasurer, executive director and day-to-day manager of the organization, and ran it out of his law office. He took a salary from the pooled-asset trust based on its growth in excess revenues, and that salary eventually reached $70,000. The lawyer then sought a declaration from the federal district court in the District of Columbia that his organization qualified for 501(c)(3) tax-exempt status. This fall, the court denied… Read more
Developer’s Conservation Easement Chopped Based on Comparable Land Sales after Donation
A Colorado home site developer donated about 85% of a proposed 450-acre development as a conservation easement to a conservation organization. The easement restricted uses of the property, thus reducing its value and qualifying as a charitable contribution. The developer claimed a deduction of about $2.2 million, but when the IRS audited, it said the easement was worthless because it did not diminish the value of the property. The Tax Court then applied the usual before-and-after test to value the easement. Under such a test, the easement’s value is the diminution in the property’s value that the easement caused, and… Read more
Antitrust Suits Target Trade and Professional Association
Several recent antitrust suits involving commercial radio, egg pricing, and tennis professionals are targeting associations and industry groups. In the egg pricing case, for instance, grocers and food manufacturers claim that egg producers have been using their trade associations to conceal their plan to decrease egg supply through animal health guidelines. What These Cases Teach: Antitrust plaintiffs and enforcers often look at trade and professional associations first in their search for liability, because associations, by definition, bring together competitors. Proving that the association puts competitors in the same room shows at least an opportunity to conspire, and much of what… Read more
Former Non-Profit News Associate Editor Lisa Branch Appointed Georgia Court of Appeals Judge
SGR is happy to report that Lisa Branch, former Partner and Associate Editor of Nonprofit News, has been appointed by the Governor of Georgia to the Georgia Court of Appeals. We appreciate her help in producing Nonprofit News and wish her the best during her service on the Court.