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Home :  Federal Budget & Tax : 
Federal Budget & Tax:      News     Blog     Background    



Wednesday, August 02, 2006

The Mystery Deepens

Adam wondered last week why Senate Majority Leader Bill Frist (R-TN) is so fanatical about passing an estate tax cut. I have to admit: I, too, am intrigued as to why after a couple of failed attempts to get that dastardly thing passed Frist keeps banging his head against the wall. This AP story, however, only intensifies the mystery. Why slash the estate tax when you can get around it by "donating" it to yourself?

Frist and his wife are the sole trustees in charge of a family foundation bearing the senator's name, according to Internal Revenue Service forms.

[The] foundation had more than $2 million in assets in 2004, the last year for which a tax form was available.

Frist...set up the organization about 12 years ago. It did not have much money until 2001 when Frist inherited HCA Inc. stock from his mother.

Janne Gallagher, vice president and general counsel at the Washington-based Council on Foundations, said assets that go directly from an estate into a private family foundation, as in this case, are generally not taxed, unlike money distributed directly to heirs. She said once in the foundation, the money is largely tax exempt.

His foundation did not make charitable contributions in 2004 or 2003. However, but that was allowed under IRS payout rules that generally require annual donations because the foundation in 2002 made a large contribution of roughly $877,000.

That went to the Montgomery Bell Academy, a private boys' school in Nashville that Frist attended.

Associated Press: Frist fails to disclose foundation role



Posted by Craig Jennings



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