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Brian Galle @bdgesq.bsky.social · 1d

Public schools are exempt under 1930s-era IRS rulings on quasi-sovereign entities. But donations to them are still limited by the "exclusively public" language, see IRS 170(c).

So if a public accepts the offer, it would prob. still be tax-exempt, but unable to receive tax-deductible donations.

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Brian Galle @bdgesq.bsky.social · 1d

The problem in accepting is that the offer requires schools to refund donations to donors if the school violates the offer terms. That contravenes the 501(c)(3) rule that all donations are irrevocable. Similarly, donations to any entity are deductible only if for "exclusively public purposes."

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Brian Galle @bdgesq.bsky.social · 1d

Private schools that accept the POTUS offer would end their 501(c)(3) status. Publics are trickier, because--little-know fact---most of them aren't c(3)'s at all. What happens to them if they accept? Some thoughts.

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www.bloomberg.com/news/article...

Trump Offers All Colleges Preferential Funding Plan Rejected by MIT

The Trump administration is inviting all US colleges to participate in a compact — initially rejected by the Massachusetts Institute of Technology — that would grant preferential federal funding in re...

www.bloomberg.com

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Brian Galle @bdgesq.bsky.social · 1d

So the spin-off premium is actually all about preventing tunneling?

Brian Galle @bdgesq.bsky.social · 5d

I have a book-length exploration of the economic and tax policy implications of this fact coming next month with @rooseveltinstitute.org : "How to Tax the Rich." You're going to like the retail price (it starts with 0 and ends with 0). Have your download fingers ready.

Liberal Currents @liberalcurrents.com · 5d

“The problem with billionaires isn’t that they’re hoarding money that would otherwise pay for a Scandinavian social utopia. It’s that their money has become a source of wildly distorted political power that allows a few men with extremist views to wreak havoc on the rest of us.”

Billionaires Are Hoarding Power, Not Money

Billionaire money has become a source of wildly distorted political power that allows a few men with extremist views to wreak havoc on the rest of us.

www.liberalcurrents.com

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Liberal Currents @liberalcurrents.com · 5d

“The problem with billionaires isn’t that they’re hoarding money that would otherwise pay for a Scandinavian social utopia. It’s that their money has become a source of wildly distorted political power that allows a few men with extremist views to wreak havoc on the rest of us.”

Billionaires Are Hoarding Power, Not Money

Billionaire money has become a source of wildly distorted political power that allows a few men with extremist views to wreak havoc on the rest of us.

www.liberalcurrents.com

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Brian Galle @bdgesq.bsky.social · 6d

The "practical hurdles" of taxing wealth are much less than you think! I have a whole book about this coming out next month. So, why not all of the above? There's no reason these policies have to be substitutes rather than complements.

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Brian Galle @bdgesq.bsky.social · 10d

Just to develop the tax / nonprofit angle a bit more, the last sentence (allowing donors to claw back donations) would violate every 501(c)(3) organization's governing documents, and make them ineligible for deductible contributions. State orgs a little more complicated but likely same result.

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Brian Galle @bdgesq.bsky.social · 10d

Also worth mentioning to university administrators: the language on returning private donations to the donor will make *all* donations to the signatory institution non-deductible. Section 170 requires irrevocable commitment.

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Brian Galle @bdgesq.bsky.social · 12d

We're grateful for this generous Jotwell write-up of "Taxing Dynasties" from Kent Schenkel (who is seemingly not on bsky).

trustest.jotwell.com/a-prescripti...

A Prescription for Taxation of Dynasty Trusts - Trusts & Estates

Brian Galle, David Gamage & Bob Lord, Taxing Dynasties, available at SSRN (April 11, 2025).Kent D. Schenkel“Only morons pay the estate tax.” That is a bit of hyperbole, of course, from Gary Cohn, the ...

trustest.jotwell.com

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Brian Galle @bdgesq.bsky.social · 17d

Unfortunately carryover basis may just continue lock-in for the inheritor generation. Carryover plus an interest charge, with a taxpayer option to settle without further interest charges, is the proposal I've developed for wealthy heirs. Might make sense for homeowners with large equity amounts too.

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Brian Galle @bdgesq.bsky.social · 22d

N.b. the language about orgs that fund "such activities."

Brian Galle @bdgesq.bsky.social · 22d

George might be right but short of a pardon that would not protect IRS or exec. office of the President employees.

There may be angles other than 501p here that affected c3s should consider with counsel, IMO. Let's not spell them out for the administration though!

Brian Galle @bdgesq.bsky.social · 22d

If I were an IRS employee tasked with assigning auditors for nonprofit orgs, I would probably want advice of counsel today on whether I have a reporting obligation under 7217(b).

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Brian Galle @bdgesq.bsky.social · 22d

(W/r/t any real organizations that might be describes in the "material support" clause).

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Brian Galle @bdgesq.bsky.social · 22d

Since IRS is within "all executive agencies," this directive appears to violate the criminal prohibition on presidents ordering tax audits.

www.law.cornell.edu/uscode/text/...

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Brian Galle @bdgesq.bsky.social · 23d

Indeed, some might say they are necessary to save this economy. Some might even say it at 75,000-word length!

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David Dayen @ddayen.bsky.social · 23d

The proposed 2% "Zucman Tax" on wealth in France is garnering huge crowds and overwhelming support. It's reveals the political durability of proposals to tax the rich, as Harold Meyerson writes.
prospect.org/economy/2025...

Clamoring to Tax the Rich

In Berkeley, New York, Paris, and Vatican City, it’s become central to political battles—and religious concerns.

prospect.org

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Brian Galle @bdgesq.bsky.social · 23d

If anyone noticed a little rattle in Berkeley this morning, that was me dropping my manuscript on some commenters. Sorry.

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Brian Galle @bdgesq.bsky.social · 24d

I like this angle but hmm, is taking bribes a "trade or business"?

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Brian Galle @bdgesq.bsky.social · 25d

From what I'm hearing we're about to explore the legal boundaries of www.law.cornell.edu/uscode/text/...

26 U.S. Code § 7217 - Prohibition on executive branch influence over taxpayer audits and other investigations

www.law.cornell.edu

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Brian Galle @bdgesq.bsky.social · 27d

bsky.app/profile/did:...

Brian Galle @bdgesq.bsky.social · 28d

A impressive team of nonprofit law experts (+me), have banded together to comment on the new proposed rules from the Education Dept. on public service loan forgiveness.

The rule purports to give ED authority to strip PSLF eligibility from any employer that acts with an "illegal purpose."

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Brian Galle @bdgesq.bsky.social · 28d

Thanks, Gene!

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Gene Takagi @gtak.bsky.social · 28d

Read the entire thread. See also www.regulations.gov/comment/ED-2... - co-written by several of the brightest minds and academics in the area of nonprofit and tax exemption law.

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Brian Galle @bdgesq.bsky.social · 28d

You can read our whole comment here:
www.regulations.gov/comment/ED-2...

Regulations.gov

www.regulations.gov

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Brian Galle @bdgesq.bsky.social · 28d

Our comment gets into all these points in more detail, of course, as well as other questionable aspects of the rule. Of course, a group effort, with extra thanks to @ellenaprill.bsky.social @benleff.bsky.social and Lloyd Meyer, plus helpful thoughts from folks like @smbrnsn.bsky.social .

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Brian Galle @bdgesq.bsky.social · 28d

One way this cashes out is that it seems obvious Ed lacks authority to issue the proposed rule. Ed is laying claim to a power that it has no expertise in administering, and which SCOTUS has already said Congress intended to deny to another, more expert, agency.

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Brian Galle @bdgesq.bsky.social · 28d

So, no, IRS cannot revoke charitable status based on any random chicken-shit local ordinance, or even on violations of civil rights law generally. Widespread social agreement is key, because otherwise IRS has too much power to punish the “unorthodox.”

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Brian Galle @bdgesq.bsky.social · 28d

We know this because Bob Jones Univ. had in fact broken the law repeatedly, and the opinion never even bothers mentioning that fact. E.g., in 1974, BJU lost a Title VI case in the 4th circuit, and didn’t even bother filing for cert. This could have made the whole rest of the opinion dictum.

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Brian Galle @bdgesq.bsky.social · 28d

That is not what Bob Jones says. Illegality isn’t some kind of special exception to the definition of “fundamental” public policy; instead, “malum in se” crimes like burglary and terrorisms are just examples of widespread social agreement.

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