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Abstract: 

In our regular survey of PLRs affecting family foundations, Katherine David reviews rulings that to qualify for exemption, organizations must serve public, not private interest: in one ruling, the service ruled that because selection criteria were tailored to apply only to founders’ son, a scholarship organization does not qualify for exemption; in another, the IRS ruled that a lymphoma support organization served a private interest and therefor did not qualify for tax exemption. In letters on unrelated business questions, the service ruled that revenue from technical services activity not unrelated business taxable income; and that a foundation’s operation of a coffee shop does not give rise to unrelated business income and that associated expenses are qualifying distributions. We also report on private letter rulings concerning self-dealing from youth program participants’ service to a for-profit company.

Keywords: Unrelated business income; self-dealing; public v. private interest

Affiliations:  1: Strasburger & Price, LLP.