May 6, 1999 | Read Time: 2 minutes
* Elaine L. Chao, former president of United Way of America and currently a fellow at the Heritage Foundation, says that adoption of a flat tax in place of the current income tax would be good for charities — even if taxpayers would no longer be able to take charitable-contribution deductions. The reason, says Ms. Chao: “The flat tax will increase economic growth, personal income, savings, and net wealth, all of which lead to higher levels of giving.” Ms. Chao’s analysis is contained in a new book, The I.R.S. v. The People: Time for Real Tax Reform, published by the Heritage Foundation.
* The I.R.S. has issued a ruling saying that the president and secretary of a private operating foundation can live rent-free in a house on fund property that is being developed as a Christian retreat and conference center. The president and secretary of the organization are married and plan to live in the property only until the center opens for business. Foundations generally are prohibited from providing goods, services, or facilities to key officials. But in this case, the I.R.S. concluded that the accommodations amounted to reasonable, partial compensation for the couple’s services as “development managers” — as long as the two move when the project is completed (Letter Ruling 199913040).
* The I.R.S. has appointed Evelyn A. Petschek, the assistant commissioner for employee plans and exempt organizations, to become head of the agency’s new Tax Exempt Operating Division. The division will open for business later this year or early next year in Washington. The I.R.S. is consolidating its bureaucracy into four units; Ms. Petschek’s will include charities and foundations.
