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Abstract

Part I of this Article traces the historical development of Code Section 4943 and the business entanglement issues that the Code Section was designed to combat. It then discusses developments in the law that occurred after the passage of Section 4943 that have implications for its structure, most importantly the introduction of the LLC. Part II describes the current statutory scheme of Section 4943, and the ambiguity in the manner in which it applies, and the practical problems and abuses that potentially arise from this ambiguity. In Part III, the Article reviews various options for clarifying the treatment of Section 4943 and evaluates them in light of the ongoing debate regarding the intersection of charity and business. This Article concludes, in Part IV, with a recommendation for change that provides administrative clarity and minimizes the possibility of abuse while allowing for modern investment practices.

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