A tax-exempt private foundation is prohibited from transferring any of its income or assets to a disqualified person. A disqualified person is defined as someone with a “particular, usually intimate relationship with respect to a private foundation” according to Bruce R. Hopkins in his book entitled The Law of Tax-Exempt Organizations.
A tax-exempt foundation, by design, is supposed to transfer its income or assets in a lawful manner and to not transfer its income or assets to a disqualified person. On the Donald J. Trump Foundation’s federal Form 990-PH, Return of Private Foundation, tax return, the Foundation answered yes when asked if it had transferred any income or assets to a disqualified person.
It is not certain from the tax return whether Donald Trump himself is the disqualified person referenced in the tax return. Also, according to its tax return, the Foundation indicated that it had transferred income or assets to a disqualified person or disqualified persons in prior years as well.
Rep. Elijah E. Cummings, D-MD, of the House Oversight and Government Reform Committee, recently drafted a letter to the Foundation’s law firm asking for documents related to the transfer of the Foundation’s income or assets to the disqualified person along with the identity of the disqualified person and other related information.
Cummings specifically inquired as to what Donald Trump knew and what action he took in response to the referenced transfers. It will be interesting to learn who this disqualified person or persons were and what income or assets were transferred to them. It will also be interesting to see what action the IRS takes against the Donald J. Trump Foundation regarding this issue. What do you think?