Soon I Start Charity For Taxi Mechanics From Old Country

Originally Published on forbes.com on August 14th,2011

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One of my favorite TV tropes is “the old country”.  One of the characters would have some sort of encounter with a parent or a memory about how things were in “the old country”.  In the really funny ones “the old country” was unspecified.  Since it had to be European, but unspecified, it always seemed kind of Eastern European, somewhere in the Balkans, maybe.  One of the shows that executed the trope very well was Taxi, with Andy Kaufman playing the mechanic Latka.  In one scene, done in Latka’s “native language”, with English subtitles, he is remembering his mother trying to talk him out of going to America.  She cautions him that in America “They eat chickens and keep dogs as pets.”  At any rate, I love “the old country” especially when it is unspecified.  Hence, I just had to write about PLR 201130018  This particular ruling is a denial of exempt status.  Denials of exempt status are about the only source of humor to be found in the entire body of private letter rulings.  The rulings are anonymous, so the organization is identified as ORG.  ORG was formed to:

recognize the achievements of those immigrantsto the United States from Eastern European area commonly referred to as Country (and more fully described in the Grant process attached hereto as Addendum I below) who, through their love, passion, and participation in the performing arts, brought a unique view of humanity, a special dedication to culture, and an extraordinary enlightenment to the United States from Eastern Europe. In recognition of what these immigrants brought to their families and to the overall community, current Americans of (Old Country) descent with to recognize the contributions of and assist future generations with financial assistance for college. The corporation is founded, and funded, with this mission in mind. By seeking contributions, bequests, and inter vivos gifts, the Fund seeks to aid juniors and seniors in college, who are descendants of immigrants in the performing arts, with financial aid to help insure success in either college or vocational school.”

It is crystal clear what country ORG has been formed to celebrate – The Old Country- the one that Latka came from along with every single colorful TV immigrant who was not from Ireland, Italy, Germany or one of the Scandinavian countries. I’m so inspired.  I want to burst out into a song in the language of the Old Country, while someone plays along on one of the musical instruments that they use there. The musical tradition of the Old Country can be best understood by Americans in the region where many of the immigrants from the Old Country settled:

Students who wanted to receive a scholarship from ORG had to meet certain requirements:

All undergraduate students attending anaccredited college, university, or vocational schoolmay apply. They need to be a junior or senior in college or the last 50% of their vocational training. Applicants will be considered eligible for assistance if such an applicant is a descendant of an immigrant to the United States who has emigrated from [The Old]Country and if that immigrant was involved in the performing arts.

Inquiry was made about the origin of the idea behind ORG:

The scholarship program and the entire mission of the organization came about from good, old Eastern European guilt. While visiting the United States Smithsonian’s Holocaust Memorial Museum in City, Statewith an elderly client, the undersigned was struck by the immense culture and heritage of communities in pre-WWI and WWII [Old]Country (both Jewish and non-Jewish). While many residents of Country were forced to work each day to survive, some ignored the challenges of every day life to maintain and sustain the performing arts. The same individuals came to the United States seeking a better life, endeavoring to fulfill the dream of life, liberty, and happiness.While we cannot assist most of the immigrants today, as they are deceased, their grand children, great-grandchildren, and further generations are here and should be honored for not only the cultural contributions of their ancestors but also the tenacity to emigrate from what they knew and immigrate to the unknown in America.That day in City, the undersigned’s client asked why someone cannot recognize and honor these immigrants. Given the fact that educational assistance carries a timeless need, this scholarship program was thus envisioned.”

That was a nice touch to move the application along.  Ellis Island isn’t good enough.  Let’s pull out the trump card and bring in the Holocaust.

Questions were raised as to whether the children of people involved in the organization might get scholarships:

You inquire as to whether potential scholarship applicants will be related to members of the organization’s board of directors, and if so, can such applicants apply for assistance. It is quite normal, logical, and sensible that the people who will involved in the organization, through its fund-raising and governance, will be those who care about honoring and recognizing immigrants.Generally, they will be descendants of immigrants themselves. However, the organization is determined both not to exclude eligible students from aid simply because a family member is involved with the organization yet not to provide any biased assistance to a student because of family involvements.

Wow, generally the board members will be descendants of immigrants.  Go figure.  I would have thought that they would have sought out people who were exclusively descended from the indigenous peoples or those taken in captivity to America.

As the ruling proceeds the facts start getting uglier.  Essentially someone known in the ruling as RA-1 had left money in his will for the education of nephews and nieces.  There were estate taxes, which people preferred not to pay.  There was litigation.  This was the true genesis of ORG:

December 18, 20XX regarding a law suit filed by . In that letter, BM-1 stated, on page 11 of Attachment 13 stated: “The return represents an aggressive decision by us and our accountants to try to minimize our damages due to poor drafting. We formed a 501(c)(3) scholarship fund, post mortem, with the hope that the IRS will ignore the specific provisions of the will and let us do what should have done originally. Consequently, we deducted the monies transferred to the scholarship fund, thus minimizing our taxes. At the same time, we forwarded to the taxing authorities the nexessary tax as if the deduction is not allowed, so that we do not have an underpayment penaly or interest. We fully expect the IRS to disallow what we did, but we at least wanted to try.”

 I guess RA-1 played that instrument that was so popular back in the Old Country.  This is not the funniest PLR ever.  That would be the 2007 ruling, which was subsequently litigated in Free Fertility Foundation v Com.  Free Fertility provided sperm donations to worthy women.  There was a donor catalogue – with one donor, the founder.  Still this one is pretty good.  Here is a link to the full text.Private Letter Ruling 201130018