TLG Managing Partner Jeff Tenenbaum Quoted Extensively in Chronicle of Philanthropy Article, “Trump Threats to Tax-Exempt Status: Can the Rhetoric Become Reality?”

TLG Managing Partner Jeff Tenenbaum was quoted extensively in the Chronicle of Philanthropy article, “Trump Threats to Tax-Exempt Status: Can the Rhetoric Become Reality?” “Jeffrey Tenenbaum, a lawyer who counsels nonprofits, outlined the procedure in a recent post on his firm’s website. The Internal Revenue Service typically begins the process with an examination, or audit. If that leads to a proposed revocation of tax-exempt status, the charity still has ample opportunities to appeal — initially to the IRS directly and later, if tax-exempt status was revoked, through the federal court system.”

“Congress, which sets the laws by which groups receive tax exemptions, is looking at changes that could also roil the nonprofit sector. Republican lawmakers may seek to tax charities with “business-like” revenue, such as hospitals and credit unions, because lawmakers will need new sources of revenue to offset the costs of extending the federal tax cuts passed in 2017, most of which expire this year.

Potentially, both the administration and Congress could act this year to strip the exemption from charities — a one-two punch that Tenenbaum calls “the biggest threat to nonprofit organizations that I’ve seen in my lifetime.” “It’s getting people scared,” he said. “It’s creating a lot of misinformation.” Tenenbaum is trying to calm clients by sharing his experiences from a long legal career in which he’s defended 75 charities undergoing IRS audits or appeals. “I’ve been through this many times,” he said. “The administration doesn’t have the authority to take away one’s exempt status with the stroke of a pen.”

But some of Tenenbaum’s clients are pushing back against his reassurances even when they understand the legal protections. They foresee Trump moving ahead to strip status with little regard for the law.

“Some people are concerned that the administration might not follow the legally prescribed process for revocation,” Tenenbaum said. “That’s a legitimate concern.””