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Re: Most Important of the Bylaws Changes

On Wed, 7 Oct 1998, Randy H Eiland wrote:

> Kat brought up several points about our upcoming Bylaws Amendment vote,
> some are better answered by others, but I can answer her questions on the
> Amendment required by the IRS:

Let me see if I can explain my concerns about the changes outlined in 
Proposal 1, since Randy did not address them at all.  To say, "we have 
to do it because the IRS says so" is not what I consider to be a good 
answer.  This is being passed off as just some administrative bullshit 
that the IRS is making us do.

However, we are being asked to vote, not only to change the Articles of 
Incorporation, but to abide by these changes as well.  And, in essence, 
we are being asked to adopt part of the Internal Revenue Code as part 
of our Articles of Incorporation (specifically sections 501(c)(3) and 
170(c)(2)) AND "the corresponding provision/s of ANY FUTURE United 
States Internal Revenue Law" (emphasis mine).  So if the Internal 
Revenue Law changes, the restrictions in our Articles of Incorporation 
change too--without a member vote.

And what we are being asked to vote on are restrictions of the 
activities of the organization (i.e. "shall not carry on any activity 
not permitted to be carried on. . .")  What are these activities??? 

For instance, is it permitted for a tax exempt/charitable organization 
to distribute the funds of the organization back to the members in the 
form of valuable "awards"???  I DON'T KNOW.

Do you?  I probably know more about what it says in the tax code than 
many of the members that are being asked to vote on this, but 501(c)(3) 
corporations is a whole separate sub-specialty for tax experts, and I 
don't know enough to know what I am voting on.

I COULD go hunt down the applicable tax codes, but I would like to 
think that the Board of Directors has done this already (BEFORE they 
voted on it themselves).  Considering that Randy says that this is THE 
MOST IMPORTANT CHANGE that we are voting on (emphasis his), I would 
like to think that it was important enough for all of us to be informed 
about exactly what we are voting on.  Exactly what we are agreeing that 
the AERC won't be doing.

I do not consider it reasonable to assume that this is not an onerous 
restriction.  If it were a simple restriction, all corporations would 
just adopt it and become tax exempt.  SOMEBODY ought to currently know 
what it is that we aren't supposed to be doing in order to retain tax 
exempt status (it is not merely a case of writing the Articles of 
Incorporation correctly).

If nobody has bothered to actually investigate the sections of the 
Internal Revenue Code that we are voting to adopt, I will do it--and 
report back; but if somebody has already done this (which I HOPE is the 
case), could he/she/they perhaps enlighten the rest of us?  And to have 
it included ON the ballot that is sent out to the entire membership 
would be, I consider, entirely appropriate, so that all members can 
make an informed decision, rather than just those who read about it on 

I DO NOT consider this just to be some idiotic, administrative 
technicality that must be gotten through; it is addressing the basic 
activities of the organization.  And I consider it a matter that 
requires careful and informed consideration.

Because it is important, doesn't mean that we should just approve it with
a rubber stamp.  I do not consider it prudent to just say, "whatever you
say..." to the IRS!

Orange County, Calif.

> TAX.

Nitpicky yet again, but this is an amendment to the Articles of
Incorporation, not the By-laws (the reason I care about this is that I
have in my book "AERC Rules and Regulations" c June 1997 a copy of the
current by-laws.  I do not have a copy of the current Articles of

And again I state, if this is THE MOST IMPORTANT, then it is most
important that we be fully informed. 

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