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Abstract: 

As first reported by The Washington Post, David Nielsen, a former senior portfolio manager has filed a whistleblower complaint with the IRS, alleging that Ensign Peak Advisors, Inc. (Ensign), a supporting organization and integrated auxiliary of the Church of Jesus Christ of Latter-day Saints, has amassed about $100 billion in assets. However, according to the complaint, Ensign has not directly funded any religious, educational, or charitable activities in its 22 years. If true, these allegations indicate that Ensign may not qualify for tax-exempt status: if it does not carry out charitable activities proportionate to its financial resources, it is not operated for IRC §501(c)(3) purposes. The complaint also alleges that Ensign engaged in private benefit transactions by propping up an insurance company and shopping mall that were adversely affected by the 2008 economic downturn. This article examines the current law on whistleblowers and offers best-practice guidelines for establishing a policy for your foundation, including a sample policy.

Keywords: The IRS Whistleblower Program; Prohibition on Retaliation; Section 1107 Sarbanes-Oxley Act

Affiliations:  1: Clark Hill PLC.