Texas C-Bar Pro Bono Week Dallas Volunteer Attorney Project Critical Compliance and Ethics Issues for Nonprofit Tax-Exempt Organizations Darren B. Moore.

Texas C-Bar Pro Bono WeekDallas VolunteerAttorney Project

Critical Compliance and Ethics Issues for Nonprofit Tax-Exempt Organizations

Darren B. Moore

Bourland, Wall & Wenzel, P.C.Attorneys and Counselors

301 Commerce Street, Suite 1500Fort Worth, Texas 76102

(817) 877-1088(817) 877-1636 (facsimile)

E-mail: [email protected]©Bourland, Wall & Wenzel, P.C.

Governance; State Standards of Care; Attorney General Oversight

Prepared By:Darren B. MooreBourland, Wall & Wenzel, P.C.301 Commerce Street, Suite 1500Fort Worth, Texas 76102(817) 877-1088(817) 877-1636 (facsimilie)E-mail: [email protected]©Bourland, Wall & Wenzel, P.C.

Nonprofit Organizations – Nonprofit Organizations – 2012 2012

Class #2Class #2

Charitable Trust – Texas Trust Code; Common law

Nonprofit unincorporated association –Texas Business Organizations Code; Common law

Nonprofit Corporation – Texas Business Organizations Code; Common law

Limited Liability Company – Texas Business Organizations Code; Common Law

What Law Applies?

Who Owes the Duties?

Directors At least 3 Voting rights carry responsibility Largely charged with making strategic decisions, evaluating, reviewing,

overseeing and approving corporate actionsOfficers

May hold multiple offices but same person may not be both President and Secretary

Owe duties within the scope of implementing decisions and policies established by the Board

Member In instances in which the organization is member-managed by a sole

member, the member takes on the duties of a director

Both trustees and directors owe basic fiduciary duties

Duties owed by directors are not those owed by trustees (BOC 22.223)

In reality, it is a matter of the degree of strictness to which the fiduciary is held

All fiduciaries aren’t created equally

Fiduciary Duties

1. Duty of Care2. Duty of Loyalty

3. Duty of Obedience

Additional duties may apply related to investment of assets

Exercise care and skill of person of ordinary prudence in dealing with person’s own property

Liable for simple negligence

Administer the trust in good faith according to its terms, the Trust Code, and where not inconsistent, the duties imposed on trustees at common law (Tex. Trust Code 113.051)

Duty of Care - Trustees

Administer trust property solely for the benefit of beneficiaries Avoid conflict of interest transactions even if fair to

beneficiaries absent full disclosure and consent of beneficiaries If trustee cannot demonstrate full disclosure and consent,

transaction may be set aside regardless of fairness Certain transactions may be set aside irrespective of disclosure

Duty of Loyalty - Trustees

Act in good faith Use care that a person of ordinary prudence would use in

same or similar circumstances (reasonable skills) Make decisions reasonably believed to be in the best

interest of the corporation Reasonableness based on objective facts available to the

decision maker

Duty of Care - Directors

Directors of nonprofit corporations are not liable where they exercise their business judgment in making decisions on behalf of organization. Parameters not clearly defined (compare for profit context) Statutory law governing nonprofit corporations simply refers to

the duty of care Essentially means directors are not liable for simple negligence

absent fraud, illegality or a disabling conflict of interest

Duty of Care: Business Judgment Rule and Directors

Investment: Uniform Prudent Investor Act

Consider investment portfolio as a whole Diversify investments Delegate decisions

UPMIFA Uniform law governing management, investment, and expenditure of

funds held by charitable organizations within its scope. (Replaces UMIFA)

Intended to modernize the rules for expenditures from endowment funds and update provisions governing the release and modification of restrictions on charitable funds.

Standard of Care: Ordinary business care and prudence under the facts and circumstances prevailing at the time of the action/decision Prudence standard consistent with the UPIA

Permits expenditure of net appreciation in FMV of endowment assets over “historic dollar value” Sets certain rebuttable presumptions of imprudent spending

Allows for delegation of investment authority so long as prudent under the circumstances

Allows for release of donor restrictions when donor consents in tangible or electronic writing or court grants permission

Duty of Loyalty Exercise an “extreme measure of candor, unselfishness and good

faith” Don’t usurp corporate opportunities Transactions with organization must be fair to the organization Maintain appropriate confidentiality

Corporate Opportunity Prohibits a director from usurping corporate opportunities (i.e.

opportunities in which the corporation has a legitimate interest or expectancy and the financial resources to exploit)

Where closely related to corporate operations, must disclose (timely)

Defenses where no disclosure: Not same line of business Corporation abandoned opportunity Corporation lacked financial resources to pursue the opportunity

Before a director engages in a transaction which he or she reasonably should know may be of interest to the corporation, the director should disclose the transaction to the board in sufficient detail (all material facts) and adequate time to enable the board to act or decline to act with regard to such transaction.

Corporate Opportunity

Interested Transactions Not inherently unethical or a violation of law

Note: Loans to directors are a statutory violation Key is disclosure and how the director and board then deal

with a disclosed conflict (i.e. upon disclosure the board should provide a disinterested review of the matter)

Decision makers should consider adopting a conflict of interest policy

Interested TransactionsAn officer of director is interested if he: makes a personal profit from the transaction with the

corporation; buys or sells assets of the corporation; transacts business in the officer’s or director’s capacity with

a second corporation of which the officer or director has a significant financial interest; or

transacts corporate business in the officer’s or director’s capacity with a member of his family.

Dealing with Disclosed Conflict

Interested transactions are presumed unfair on the part of the decision maker, fraudulent on the corporation and generally voidable.

“Safe Harbor” Interested decision maker discloses material facts Majority of the disinterested directors, in good faith and the exercise of

ordinary care, authorize the transaction

Conflict of Interest PolicyIf an organization chooses to adopt a policy, the policy should consider the following:

1. Identification of the class of individuals covered by the policy;2. Definition of "actual" and "potential" conflicts of interest;3. Articulation of the duty of disclosure of officers and directors;4. Appropriate "trigger" mechanisms to help identify potential conflicts;5. Annual, episodic disclosure obligations of individuals covered by the policy;6. Written conflicts disclosure questionnaires;7. A process for review of disclosed potential conflicts by a committee

of disinterested directors with outside counsel’s input;8. The applicability of the corporate opportunity doctrine to the board;9. Disclosure obligations regarding outside board service of officers

and directors; and10. Disclosure obligations regarding outside business activities of senior

executive leadership.

Duty of Obedience Remain faithful to and pursue the goals of the organization

Follow the governing documents of the organization, laws applicable to the organization (including reporting and regulatory requirements), and restrictions imposed by donors

Ensure charitable assets are not diverted to non-charitable uses

Liability requires personal participation or actual knowledge of the wrongful act

Permissive Director in good faith Director reasonably believed

she acted in the best interests of the corporation (or, if not conduct in official capacity, not in opposition to corporation’s interests)

Criminal: no reason to believe conduct was unlawful

Indemnification Precluded Found liable for receiving

personal benefit improperly Found liable to the

corporationBut: Can still be indemnified

for reasonable expenses incurred in connection with proceeding so long as not found liable for willful or intentional misconduct in performing corporate duties

Must have a provision in the governing documents to provide for indemnification during litigation

Nonprofit must reimburse reasonable expenses incurred by a director after a court order and the exhaustion of all appeals where the director is successful in defending the lawsuit

Mandatory Indemnification

Standing to Bring a Complaint Nonprofit Corporations:

Organization (and/or its members where applicable) OAG Donors in very narrow circumstances (must retain a special

interest in the donated gift)

Note: Venue for breach of fiduciary duty claims brought by the OAG lies in Travis County

Common Law AuthorityConstitutional AuthorityStatutory Authority

Authority of AG as to Charitable Organizations

Representative of the public interest in charity (standing) Duty to ensure charity assets used for appropriate charitable

purposes Broad authority to carry out duty Power and Duty derived from Statute of Charitable Uses (cf.

Tex. Civ. Prac. & Rem. Code s 5.001)

Common Law Authority of the AG

AG shall “perform such other duties as may be required by law.”

“[The AG] shall represent the state in all suits and pleas in the Supreme Court of the State in which the State may be a party, and shall especially inquire into the charter rights of all private corporations and from time to time, in the name of the State, take such action as may be proper and necessary to prevent any private corporation from exercising any power . . . Not authorized by law.” Article IV, Section 22 Texas Constitution

Constitutional Authority of the AG

Chapter 123 of the Texas Property Code Defines charitable trusts to include virtually all charitable entities AG is a proper (although not necessary party) to proceedings

involving charitable trusts (must receive notice and have right to intervene on behalf of public)

Doesn’t provide any substantive rights (builds on common law authority)

Statutory Authority of the AG

Bingo Enabling Act Charitable Raffle Enabling Act Solicitation in the name of veterans’ organization Solicitation for Public Safety Organizations Telephone Solicitations by Charitable Organizations Duties of Nonprofit Hospitals

Statutory Enforcement Authority

Texas Business Organizations Code (Ch. 12, 22, Ch. 252)

Deceptive Trade Practices & Consumer Protection Act (17.61, Tex. Bus. & Commerce Code)

Provides AG authority to present a written request to examine the operations of the corporation (without notice)

Failure to comply with the AG can result in forfeiture of right to do business in Texas and fines for the corporation’s officers

Statutory Investigative Authority

Provides AG various powers and investigative authority over nonprofits

Many powers implied from provisions of the Act which require corporate compliance (eg keeping accurate books and records)

Authority to apply for involuntary dissolution (and liquidation)

Authority to apply for appointment of a receiver

Statutory Investigative Authority (con.)

Authorizes pre-suit investigations

Authorizes suits for enforcement

Imposes penalties for noncompliance Enhanced penalty in the

event AG determines act or practice seeking to acquire or deprive money from a consumer 65 or older

AG Authority Under the DTPAFalse, misleading, or deceptive acts or practices in the conduct of any trade or commerce

Applies to nonprofits even if they don’t charge

Applies to fraudulent solicitations regardless of whether goods or services are offered as part of the solicitation

1. Constructive trust (really a remedy)

2. Breach of fiduciary duty (venue in Travis County)

3. Violations of various statutes (see above)

4. Fraud

5. Other

Common Causes of Action by AG

Removal of trustees or board members Money damages Appointment of a receiver Injunctive relief TRO’s, asset freezes, orders of attachment Attorneys’ Fees and court costs

Remedies Commonly Sought by the AG

Hardt v. Vitae Foundation, Inc. (Missouri) Gift: Cash grant from estate (2 grants of approximately $4

Million each) Terms: To be used as matching grant for specific purpose

detailed in written grant agreement Deviation: Used for other purposes; used without first

getting matching grants Relief sought: accounting, restoration, injunction,

alternatively transfer to another charity of Plaintiffs’ choice Appellate court held no standing after rejecting arguments:

Missouri Uniform Trust Code UPMIFA Public Policy Cy Pres

Smithers v. St. Luke’s – Roosevelt Hospital Center (New York)Gift: $10 Million cash grant over timeTerms: Build free-standing alcoholism treatment

center; donor had to approve various decisionsDeviation: After being operated for a number of years

and one year after donor died, hospital decided to transfer center to hospital ward and sell building

Relief sought: accounting, injunction, restoration of lost income, specific performance, declaratory relief

Appellate court held Executrix had standing noting donors may be in a better position than the attorney general to be vigilant and enforce conditions “public policy” basis for standing

Howard v. Administrators of the Tulane Educational Fund (Louisiana)

Gift: Ms. Newcomb made gifts during life and at death to Tulane Terms: The gifts were made for the purpose of establishing a separate

college for women within Tulane Deviation: After 199 years, and as a result of the financial impact of

Hurricane Katrina, Tulane decided to merge Newcomb College into a single undergraduate college at Tulane for consistent experience

Relief sought: Collateral heirs of Mrs. Newcomb sought injunctive and declaratory relief

Appellate court determined Louisiana law allowed heirs to seek enforcement of a conditional donation; remanded to determine if Plaintiffs were heirs

Subsequent development: In new suit filed by great-great-niece, trial court ruled Mrs. Newcomb’s will did not contain an enforceable conditional obligation on the use of the donation; upheld 3-2 on appeal; LA Supreme Court denied writ

Tennessee Division of the United Daughters of the Confederacy v. Vanderbilt (Tennessee)

Gift: UDC gifted $50K to Peabody College for the construction of a dorm between 1927-1933

Terms: 2 floors dedicated to women descendants of civil war vets for rent-free housing; dorm named Confederate Memorial Hall

Deviation: After Peabody merged with Vanderbilt in 1970s, rent-free housing phased out; in 2001 Vanderbilt renamed the dorm “Memorial Hall”

Relief sought: injunction, declaratory judgment, damages Appellate court held UDC made a donation with restrictions (implicit right

of reverter); court rejected various contractual defenses and held Vanderbilt had to keep the name or pay back donation as adjusted by CPI Vanderbilt chose to “keep” the name by keeping it inscribed on the

pediment though changed on maps, etc.

Cornyn v. Fifty-Two Members of the Schoppa Family (Texas) Gift: Individuals donated DNA samples, brain tissue and medical

records for a research project examining certain genetic factors in development of certain medical conditions

Terms: Consent forms named specific individual as head of research and that donors could discontinue their participation

Deviation: Specified head of research removed from her position; University threatened destruction of donor’s samples if new consent forms not signed

Relief sought: Plaintiffs sought an injunction and declaratory relief – return of samples or transfer to trustee

Appellate court held donors had standing -- taking allegations as true -- fact-finder could find that the donors had an implied reversionary interest following termination of program (analogous to resulting trust following failure of express trust)

Dodge v. The Trustees of Randolph-Macon Women’s College(Virginia) Gift/Terms: College established in 1891 with primary purpose of

educating women in liberal arts setting; gifts made in furtherance of that purpose throughout its history

Deviation: College made the decision to provide a co-educational undergraduate experience

Relief sought: alleging breach of fiduciary duty sought injunction and declaratory relief (argued College’s assets deemed to be held in trust in furtherance of College’s purposes and a change in purposes would constitute a breach of fiduciary duty)

Appellate court held no relief available even if plaintiffs had standing (without deciding) because Uniform Trust Code and Virginia Nonstock Corporation Act did not impose trust duties on directors • no duty to refrain from changing purpose; gifts given with no express

conditions

Bases for Standing Conditional gift with right of reverter or gift over Retained special interest separate and distinct from interest of

general public Donor who is a member of the charity or serves on the board

(alleging ultra vires act)

Other Claimed Bases for Standing

Charity is deemed to be a charitable trust and holds assets in trust; plaintiffs are “beneficiaries” of trust

Texas law does not impose trust duties on directors Is the beneficiary actually a named charity or the public interest

in charity? The Uniform Principal Management of Institutional Funds Act confers

standing

No express grant of standing – look to the Hardt analysis Public policy supports a finding of standing: Texas follows the majority

rule and has never recognized a public policy exception like the one in Smithers

No common law charitable immunity Historically immune TSC abrogated in 1971 Pendulum swung back in 1987 with passage of Charitable Liability and

Immunity Act of 1987 (Section 84.001 et seq Texas Civil Practice & Remedies Code)

Charitable Immunity: Texas

Governance (cont’d) (pp. 155-182); Charitable Orgs. (Ch. 4)• if using 2nd Edition, also read:

1. Caracci v. Commissioner, 456 F3d 4442. Spitzer v. Grasso, 893 N.E.2d 1053. Vision Service Plan v. U.S., 2005 W2 3406321

Next Week

Prepared By:

Darren B. Moore

Bourland, Wall & Wenzel, P.C.

(817) 877-1088

(817) 877-1636 (facsimile)

E-mail: [email protected]

©Bourland, Wall & Wenzel, P.C.

Federal Standards of Conduct;

Charitable and Social Welfare Organizations

Federal Standards of ConductSelf-Dealing

Excess Benefit Transactions

Private Foundation Per § 509(a): Organization described in § 501(c)(3) other

than the following: Traditional public charities Publicly supported charities Supporting organizations Public safety testing organizations

(i.e. § 501(c)(3) is a private foundation if it fails to qualify as a public charity)

Public Charity Traditional charities (hospitals, churches, etc.) Publicly supported (aka gross receipts) charities (receive

substantial amount of support from public or governmental agencies)

Supporting Organizations (take status from supported organization)

Self-Dealing (PF) § 4941 – Any conflict of interest transaction between an

insider (disqualified person) and the organization Fairness to organization irrelevant Awareness by person involved that the acts constituted self-

dealing irrelevant Consequence is excise tax

Self-Dealing (Insiders)1. Foundation Managers

(officers, directors, trustees)

2. Substantial contributors (greater of 2% of total contributions for tax year or $5000)

3. 20% Owners (owner of 20%+ power of organization that is a substantial contributor)

4. Family Member of (1), (2) or (3) (spouses, ancestors, children, grandchildren, great grandchildren)

5. 35% owned entities (organizations more than 35% controlled by any of the above)

Self-Dealing Transactions1. Sale, exchange or leasing of property (unless leased to

PF free of rent)2. Lending of $$ or extension of credit (unless lent to PF

interest free)3. Furnishing of goods, services or facilities (unless

provided on same basis as to general public)4. Payment of compensation or reimbursement of expenses

that are not reasonable and necessary to accomplish an exempt purpose

5. Transfer to or use by or for the benefit of a DQP of any of the income or assets of PF

6. Certain agreements to pay a government official

Self-Dealing Consequences Two tier excise tax on DP

1. 10% of amount involved for each year (5% on foundation manager participating unless unaware act was self-dealing and not willful)

- a DP who is also a Foundation Manager can be subject to both

2. If not corrected in a timely manner, second-tier tax of 200% on DP and 50% on foundation manager)

Self-Dealing Consequences “Amount involved”: the greater of the amount of money

and the fair market value of the property given or the amount of money and fair market value of the other property received (§ 4941(e)(2))

First tier tax cannot be abated by IRS even for reasonable cause (§ 4962(b))

Self-Dealing (Estate of Reis) Courts have consistently held that statutory

scheme of excise taxes is a valid legislative response to perceived abuse in use of PF’s

Interest of PF in property of an estate (as a beneficiary of the estate) is an asset of the PF for self-dealing purposes (prohibits indirect self-dealing)

Benefit to the DP doesn’t have to be pecuniary but must be significant as opposed to tenuous

Excess Benefit Transactions Applies intermediate sanctions (excise taxes) on DP’s who

benefit improperly and on organization managers who participate in such transaction

Applies to public charities and social welfare organizations Overlaps concepts of private inurement discussed later in

course

Excess Benefit Transactions§ 4958(c)(1): Any transaction in which an economic benefit is provided by an applicable tax-exempt organization directly or indirectly to or for the use of any DP if the value of the economic benefit provided exceeds the value of the consideration (including the performance of services) received for providing such benefit.

EBT: Disqualified Persons1. Any person who was

in a position to exercise substantial influence over the affairs of the TE organization at any time during a 5 year period ending on the date of the transaction

2. A family member of a person of substantial influence

3. An entity that is 35% controlled by (1) or (2)

**Beware: this is a different definition from PF DP’s.**

Substantial Influence President, CEO, COO Treasurer, CFO Voting member of the governing body Persons with a material financial interest in a provider-

sponsored organization (e.g. nonprofit hospitals)

Persons Deemed Not to Have Substantial Influence § 501(c)(3) organizations Certain § 501(c)(4) organizations Employees receiving economic benefits of less than a

specified amount in a taxable year

Facts & Circumstances Tending to Show Substantial Influence Founder of organization

Substantial contributor

Compensation primarily based on revenues derived from activities of the organization

Has or shares authority to control/determine substantial portion of the organization’s capital expenditures

Managerial authority or key advisor to person with managerial authority

Has controlling interest in a corporation, partnership or trust that is a DP

Facts and Circumstances Tending to Show No Substantial Influence Person is an independent contractor

Person has taken a vow of poverty

Preferential treatment offered to all making comparable donations

Direct supervisor of the person is not a DP

Excess Benefit Transaction Consequences Two tier excise tax on DP

1. First tier tax of 25% of the excess benefit- can be abated under certain circumstances

2. If not corrected in a timely manner, second-tier tax of 200% of the excess benefit

Organization manager who knowingly participates pays a tax of 10% of the excess benefit not to exceed $10,000 <can be subject to both if the organization manager receives the excess benefit>

Correcting an Excess Benefit Transaction

An excess benefit transaction is corrected by undoing the excess benefit to the extent possible, and taking any additional measures necessary to place the applicable tax-exempt organization involved in the excess benefit transaction in a financial position not worse than that in which it would be if the DP had been dealing under the highest fiduciary standards. (Treas. Reg. § 53.4958-7(a))

Practical Correction1. Return the “correction amount” (the excess benefit plus

interest)

2. Return the specific property where excess benefit was transfer of property (organization must agree)

- DP (and family members) cannot vote on whether to accept the property as correction

Unreasonable Compensation as an Excess BenefitCompensation must be reasonable in relationship to the value of the services rendered Compensation paid by similarly situated organizations for

comparable positions Availability of similar services in geographic area Current compensation surveys by independents firms Written offers from competitors for the employee

EBT: Compensation Organization must clearly indicate intent to treat the

economic benefit as compensation when the benefit is paid Written contemporaneous substantiation Employment contract W-2, 1099, 990 DP reports on 1040 Exception: amounts excluded from gross income (e.g. employer-

provided health benefits)

EBT Compensation: Rebuttable Presumption of Reasonableness Transaction approved by an authorized body of the

organization composed of non-conflicted individuals Prior to making determination, authorized body obtained and

relied upon appropriate comparability data Authorized body adequately documents basis for

determination concurrently with making decision

Excess Benefit Transactions (Misc) Applies to churches (although IRS must still

follow church audit act) Applies only to post-September-1995

transactions Does not replace revocation of exemption

Has organization been involved in repeated excess benefit transactions?

Size and scope of excess benefit transaction Safeguards implemented following transaction Compliance with other applicable laws

Registered Nonprofit Organizations by IRC Subsection (National)(2003)

(c)(1)(c)(2)(c)(3)(c)(4)(c)(5)(c)(6)(c)(7)(c)(8)(c)(9)(c)(10)(c)(11)(c)(12)(c)(13)(c)(14)(c)(15)(c)(16)(c)(17)(c)(18)(c)(19)(c)(20)(c)(40)(c)(50)Other

Source: National Center for Charitable Statistics, Urban InstituteDoesn’t include most religious congregations.

Charitable Organizations § 501(c)(3) Why choose to be a 501(c)(3)?

Not required to pay income taxes May elect not to pay federal unemployment taxes Ability to attract deductible contributions State tax exemptions

§ 501(c)(3) Elements1. Proper organizational structure2. Organized exclusively for charitable

purposes3. Operated exclusively for charitable

purposes4. No part of net earnings inures to benefit of

private individual5. Not an action organization6. <<case law>> - not violative of public policy

Organizational/Operational TestsOrganizational Look to enabling

documents Must be organized

exclusively for charitable purpose(s)

May be general or specific

Operational Look at actual activities

of organization Must be operated

exclusively for charitable purpose(s)

May not engage in substantial activities that fail to further charitable purposes

More often the basis for revocation

Charitable Purpose “Primary” purpose must be charitable (“exclusive” doesn’t

mean “sole”) Charitable purposes:

Relief of poverty Advancement of education & religion Promotion of health Governmental purpose Social welfare

BBB v. United States

Social Welfare Organizations “[c]ivic leagues or organizations not organized for profit but

operated exclusively for the promotion of social welfare . . .” “exclusively” again means “primarily”

Social Welfare Organizations: Can qualify as exempt under § 501(c)(3) or (c)(4) with purposes to

further common good and benefit community

§ 501(c)(3) Contributions are

deductible Cannot be involved in

political campaigns Cannot have a primary

purpose of lobbying

§ 501(c)(4) Contributions not

deductible Can have some

involvement in political campaigns (not a primary purpose)

Can have as a primary purpose lobbying

Regan v. Taxation with Representation

Social Welfare Organizations1. Commensurate with the “common good and general

welfare” of the community

2. Doesn’t include activities that primarily constitute “carrying on business with the general public in a manner similar to organizations operated for profit”

3. Must benefit community as a whole rather than merely benefiting the organization’s membership or other select group of individuals or organizations

What is community???

Advocacy Groups Attempts to influence legislation May operate to inform public on controversial subjects even

though advocating a particular viewpoint

Q: Why is this beneficial to the community?

Cannot have as a primary purpose intervention on behalf of or in opposition to a candidate for public office.

Next WeekObtaining and Maintaining Tax-Exempt Status (Ch. 5)

The information set forth in this outline should not be considered legal advice, because every fact pattern is unique.The information set forth herein is solely for purposes of discussion and to guide practitioners in their thinking regarding the issues addressed herein.Non-lawyers are advised to consult an attorney before undertaking any issues addressed herein.

Unless otherwise stated herein, pursuant to requirements prescribed by the Internal Revenue Service under Circular 230 for tax practitioners, Bourland, Wall & Wenzel P.C. must inform you that any U.S. federal tax advice or opinions contained in this paper are not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending to another party any transaction or matter addressed in this communication.