Representing organizations charged with the public trust poses unique challenges. Meeting them requires a blend of legal insight, tax knowledge and public sensitivity. Stites & Harbison has developed that insight, knowledge and sensitivity through representing many of the areas largest public universities and hospitals, churches and religious organizations, social and civic organizations, trade associations, and both public and private foundations.
Public Charity and Non-Profit Organizations
Stites & Harbison organizes and represents non-profit corporations, charitable trusts and other charitable ventures. It advises clients with respect to exemption under Sections 501(c)(3) and 509 of the Internal Revenue Code (and other Sections of the Internal Revenue Code) and under Section 170 of the Kentucky Constitution. It also advises clients about the tax treatment of proposed transactions and the impact of same upon their tax status. The firm represents clients before the Internal Revenue Service in connection with tax audits and private letter ruling requests. Such representation frequently involves issues of unrelated business taxable income and for-profit subsidiaries. The firm also advises clients regarding sales and use tax issues.
Stites & Harbison advises trustees, boards of directors and other fiduciaries with respect to their fiduciary responsibilities. For example, the firm recently provided advice to a board of directors regarding their fiduciary duties in connection with the orderly liquidation of a financially troubled non-profit corporation. The firm assists clients in developing, implementing and maintaining qualified pension plans of all types, including representing clients in fiduciary matters with the United States Department of Labor. The firm's lawyers also represent clients in federal and state court litigation concerning claims for fiduciary liability and related issues.
Conflicts of Interest
The firm has developed a comprehensive understanding of the special needs of entities invested with the public trust -- entities whose actions are scrutinized not only by regulatory bodies, but also by members of the news media and special interest groups. Stites & Harbison has developed an intimate familiarity not only with the conflict of interest issues that arise in connection with public projects and public procurement law, but also with the more practical conflict issues relating to the perceptions that often surround such projects.
The firm works closely with the development offices of non-profit institutions on matters ranging from simple estates to complex tax issues. Recent examples include establishing the first pooled income fund in the United States holding real estate, establishing individual charitable remainder (annuity and uni) trusts, and charitable gift annuity programs for smaller institutional donors. The firm investigates complicated interpretive matters affecting all phases of non-profit development, including interpretation and administration of endowment funds and related tax consequences, and will interpretations and contests.
Stites & Harbison counsels tax-exempt organizations concerning the Taxpayer Bill of Rights "intermediate sanctions" in the form of excise taxes that can be imposed against "disqualified persons" and organization managers who benefit from an "excess benefit transaction."
"Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. [F]or nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions." —Judge Learned Hand in the Dissenting Opinion to Commissioner of Internal Revenue v. Newman, 159 F.2d 848 (2d Cir. 1947)
ATLANTA—Georgia Trend magazine has selected Stites & Harbison, PLLC attorney William M. (Bill) Joseph as one of its 2020 Legal Elite in the category of Taxes/Estates/Trusts Law. This is the seventh time Joseph has earned the Legal Elite honor.
Retirement plan sponsors and other fiduciaries are required by ERISA to discharge their duties with the “care, skill, prudence, and diligence” under the circumstances as would a prudent man. This means, among other things, fiduciaries should ensure that all fees paid by the plan for recordkeeping and investment management services are competitive and reasonable.