Lightnews — Scholar-powered news

Brian Galle @bdgesq.bsky.social · 3d

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.

Ryan Doerfler @ryandoerfler.bsky.social · 3d

By far the most important text in the compact is its final paragraph, which reads:

Adherence to this agreement shall be subject to review by the Department of Justice. Universities found to have willfully or negligently violated this agreement shall lose access to the benefits of this agreement for a period of no less than 1 year. Subsequent violations of this agreement shall result in a loss of access to the benefits of this agreement for no less than 2 years. Further, upon determination of any violations, all monies advanced by the U.S. government during the year of any violation shall be returned to the U.S. government. Finally, any private contributions to the university during the year(s) in which such violation occurred shall be returned to the grantor upon the request of the grantor.

The effect of the agreement is to hang a sword of Damocles over any compact-signing university that is not there today.

2 3

Brian Galle @bdgesq.bsky.social · 3d

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.

2

Brian Galle @bdgesq.bsky.social · 6d

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

1

Reposted by Brian Galle

Brian Galle @bdgesq.bsky.social · Aug 26

We all know that Fed governor Lisa Cook was not fired "for cause." Indeed, in court, the administration will surely argue that for-cause protections are unconstitutional.

Most other scholars say that recent decisions on indep. agencies portend an admin win on this issue. Aziz Huq & I disagree. 🧵

3 3 9

Reposted by Brian Galle

Brian Galle @bdgesq.bsky.social · May 23

Unpopular opinion right now, but I do think the Fed can be said to have a different constitutional status than other independent agencies. Ofc, they all should be constitutional. But the Fed is different, because w/out it the borrowing power would be useless.

lawreview.uchicago.edu/print-archiv...

The Constitutional Money Problem | The University of Chicago Law Review

Under the Supreme Court’s contemporary approach to constitutional meaning, there is a surprising degree of doubt about whether key aspects of the Federal Reserve (“Fed”)—its independence from Congress...

lawreview.uchicago.edu

2 2 2

Brian Galle @bdgesq.bsky.social · 10d

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.

2

Brian Galle @bdgesq.bsky.social · 15d

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

Brian Galle @bdgesq.bsky.social · 15d

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 · 15d

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).

2 1

Brian Galle @bdgesq.bsky.social · 15d

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

1

Brian Galle @bdgesq.bsky.social · 15d

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/...

1 4

Brian Galle @bdgesq.bsky.social · 16d

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

1 2

Reposted by Brian Galle

David Dayen @ddayen.bsky.social · 16d

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

16 84 230

Brian Galle @bdgesq.bsky.social · 16d

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

3

Brian Galle @bdgesq.bsky.social · 17d

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

1 1

Brian Galle @bdgesq.bsky.social · 18d

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

2

Brian Galle @bdgesq.bsky.social · 20d

bsky.app/profile/did:...

Brian Galle @bdgesq.bsky.social · 21d

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."

🧵 1/13

1 4

Brian Galle @bdgesq.bsky.social · 21d

Thanks, Gene!

1

Reposted by Brian Galle

Gene Takagi @gtak.bsky.social · 21d

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.

1 2 2

Brian Galle @bdgesq.bsky.social · 21d

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

Regulations.gov

www.regulations.gov

1 13

Brian Galle @bdgesq.bsky.social · 21d

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 .

12/13

1 17

Brian Galle @bdgesq.bsky.social · 21d

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.

11/13

2 4 24

Brian Galle @bdgesq.bsky.social · 21d

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.”

10/13

1 1 16

Brian Galle @bdgesq.bsky.social · 21d

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.

9/13

1 15

Brian Galle @bdgesq.bsky.social · 21d

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.

8/13

1 13