Friday, August 20, 2010

Museums and Arts Organizations At Risk for Losing IRS Tax Exempt Recognition: Is Your Organization on the List?

The IRS recently published a long list of non-profits that have not filed appropriate forms for the last three years. Many museums, historical societies, and arts organizations are featured. These groups risk losing their tax-exempt status if action is not taken soon.

The IRS is giving organizations the opportunity to keep their tax-exempt recognition so long as paperwork is filed by October 15, 2010.

See if you are on the list at
http://www.irs.gov/charities/article/0,,id=225889,00.html?portlet=7.

The Display of Art - A Fiduciary Duty of the Museum

Recently Eli Broad, art collector and philanthropist, told the American Association of Museums about its members' duty to take art out of storage and put it on display. “If 90% of your work is in storage you need to begin lending it to other institutions. Get art out of the basements,” The Art Newspaper reported.

The fiduciary duties of care, loyalty, and obedience obligate art museums to display their works. Museums are generally institutions legally formed for the public good. They hold works in trust for the viewing public. When works are accessioned and not displayed, museum boards of directors may be putting themselves at risk of violating their fiduciary duties.

While these duties have not been traditionally enforced by state attorneys general, the rise in deaccessions by institutions to raise revenue for operating costs could prompt greater scrutiny of these fiduciary duties. Taking works out of the basement makes good legal sense.