Doctors’ Deduction for Contribution to IRSApproved 501(c)(3) Foundation Disallowed with Penalties Under
Two (husband-and-wife) doctors bought into a plan promoted by a financial services advisor specializing in aggressive tax-avoidance programs for doctors. Under the plan, the doctors would make a charitable contribution to the advisor’s foundation and take a charitable contribution deduction. They could then use the contributed funds to educate their children. The foundation had obtained an IRS determination letter stating it was a 501(c)(3) tax-exempt organization, and the foundation was listed in the IRS’s Publication 78, which identifies such organizations for taxpayers’ guidance. In practice, though, the foundation operated for the benefit of its donor-doctors. Each doctor’s donations were kept in a segregated fund to be used as directed by the doctor. The promotional materials stated: “You could take the money out… Read more
Copyright and Trademark Checklist
Here is a checklist of what a trade or professional association should consider protecting with copyright or trademark. Other taxexempt organizations, including charities, educational institutions, and hospitals can also use the list. We’ll start first with copyright. Although recent legislation has reduced the need to mark materials with a copyright symbol, we still think it’s a prudent practice. The notation form is “© [Date] [Organization Name]”: © 2011 ABC Association. If you think there’s a realistic danger that someone might copy the materials — say, a competitor copying drawings used on your website or in your consumer brochures — you… Read more
North Carolina State Board of Dental Examiners Sues FTC After FTC Files Administrative Complaint Against Board
In our Fall 2010 issue, we reported that the Federal Trade Commission (“FTC”) had filed an administrative complaint against the North Carolina State Board of Dental Examiners (the “Board) for allegedly “colluding” to prevent non-dentists from providing teeth-whitening services. The FTC’s complaint was based primarily on letters the Board had sent to nondentist teeth-whitening providers stating that they were practicing dentistry illegally and ordering them to stop. Since that time, the Board has gone on the offensive. On February 1, 2011, in the U.S. District Court for the Eastern District of North Carolina, the Board filed a Complaint for Declaratory… Read more
Supreme Court Holds that Medical Residents Working Full-Time Are Employees for FICA Purposes
On January 11, 2011, the Supreme Court announced its holding in Mayo Foundation for Medical Education and Research et al. v. United States and applied the Federal Insurance Contributions Act (FICA) to medical residents. Medical centers offer medical residency programs typically lasting three to five years that provide additional education through hands-on experience in a specialty to become board certified. Residents often spend between fifty and eighty hours a week assisting senior residents and faculty members with patient care. Residents are usually paid an annual stipend which can exceed $40,000 and includes health and malpractice insurance as well as paid… Read more
American Bar Association’s Challenge to FTC’s
In our Fall 2010 issue, we reported that the FTC had granted a temporary reprieve to physicians for enforcement of its “red flags” rules — rules requiring creditors to implement programs to prevent identity theft — after the medical professionals sued the FTC seeking to have a court declare unlawful and set aside the rules. That case was held in abeyance pending the outcome of the American Bar Association’s lawsuit on the same rule. Congressional action has since mooted these lawsuits in a manner favorable to the groups challenging the rules. On December 18, 2010, the President signed into law… Read more
Court Finds That Trade Association Has Associational But Not Organizational Standing to Bring A Lawsuit
In 2009, the International Bottled Water Association (“IBWA”), a nonprofit corporation whose members are bottled water producers, distributors, and suppliers, filed suit against Eco Canteen, Inc. in the U.S. District Court for the Western District of North Carolina. In its lawsuit, IBWA challenged Eco-Canteen’s marketing claims that there are specific health risks associated from drinking water from plastic bottles containing polyethylene terephthalate (“PET”) and Bisphenol-A (“BPA”) as (i) false advertising under the Lanham Act and (ii) unfair and deceptive trade practices under a North Carolina statute. On September 17, 2010, the Court issued an order granting IBWA’s motion for default… Read more