Paul L. Caron

Tuesday, July 28, 2009

Henry Louis Gates' Tax Problem

From Inside Higher Ed:

A foundation created and led by Henry Louis Gates Jr. is amending its federal tax form after questions were raised about $11,000 paid to foundation officers -- funds that the original tax form called research grants, but that should have been classified as compensation, ProPublica reported. When the payments are accounted for accurately, the foundation's administrative expenses will account for 40% of its spending in 2007, not 1% as originally reported to the IRS. Gates created the Inkwell Foundation with the goal of supporting work on African and African-American literature, history and culture, the article said. The report by ProPublica also noted that some of the actual grants went to people close to Gates. Gates told ProPublica that the foundation's second-largest grant, for $6,000, went to his fiancée, Angela DeLeon,. DeLeon was formerly on the foundation board and Gates said he recused himself from a vote on the grant. A grant of $500 went to Evelyn Higginbotham, chair of the foundation's board and chair of Harvard University's Department of African and African-American studies. Gates said she didn't vote on the grant. ProPublica is an organization that conducts investigative journalism. The article noted that Gates -- the Harvard scholar who is a leading figure in African-American studies whose arrest at his home has set off a national debate about the way black men are treated by law enforcement -- also serves on ProPublica's board.

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If these angry white men had to use their full names, there would be no posts here. The anonymity serves as a hood. It would be interesting to know if taxprof can be ordered to divulge the full names of anyone who is or becomes a party in an action for, say, discrimination.

Posted by: Renee | Aug 1, 2009 11:08:45 AM

Why doesn't he just claim that the IRS is racist and get out of this too?

Posted by: Disgusted | Jul 30, 2009 8:45:48 PM

mark l., thanks for your post. These posts could have been written for a KKK site. Their perceived sense of entitlement is disgusting. I feel like I need a shower after reading them.

Posted by: Renee | Jul 29, 2009 5:46:00 PM

The IRS hates black men!! Of all the nerve...expecting them to comply with a tax law made by white oppressors.

But, the IRS should be warned: “You don’t know who you’re messing with…ya I’ll speak with your Mama outside!”

Posted by: Woody | Jul 29, 2009 2:20:13 PM

This is clearly a self dealing restriction issue and one that rightfully should be investigated.

Posted by: Clinton | Jul 29, 2009 9:53:04 AM

Come ON folks !
Move on, nothing to see.

Posted by: battery | Jul 28, 2009 9:16:48 PM

The tone of some of the comments is really depressing . . . so much resentment against black people.

Posted by: Dp148 | Jul 28, 2009 3:17:55 PM

aren't tax indiscretions covered under "affirmative action"?

it's not like the guy is a white conservative business owner, who fails to support democrats.
clearly gates' 'punishment' should be some major post in the administration.

it is rather interesting to note that the liberals are reading conservative blogs and responding, rapidly.

Posted by: mark l. | Jul 28, 2009 11:39:24 AM

Does he claim, as income, the value of the house that is provided for him by Harvard that has a damaged front door?

Posted by: Karen | Jul 28, 2009 11:30:38 AM

Before moving on to investigate the tax problems of Charles Rangel, etc. perhaps a few questions should be asked.
Who made contributions to this private foundation?
There are major self-dealing restictions between private foundations and members of the Board and their families or people with whom the Board have business relationships.(that's very over-simplified) These self-dealing restrictions cannot be waived by abstaining on a vote.
I suspect they don't apply to fiancees or girl friends.- assuming the beneficiaries actually did work.
If Professor Gates made the contributions to the foundation, and assuming the money went, not as a grant, but for services rendered, by his girlfriend- then you have the Professor making a tax-deductible gift for what was characteized originally as a grant, now apparently a salary, to his girlfriend.
So - the question becomes - what were the terms of the original grant and when re-characterized, what services was she paid for. If no services were, in fact rendered, and the Professor gave substantial sums of money to the Foundation - it could be serious, but not to worry, nothing will ever come of this.

Posted by: Concerned One | Jul 28, 2009 10:19:26 AM

This crap is getting old. I have run two not for profit corporations, and I'm sure we would have lost our tax free designation from the IRS had we made these same "mistakes". This insider game of screw the rubes needs to come to an end.

Posted by: Buford Gooch | Jul 28, 2009 10:10:31 AM

Come ON folks !
Move on, nothing to see.

These tiny little gifts to each other are rewards
for being part of the elite and working hard
to tell us flyover zone folks how to lead our lives.

Posted by: Dan_P from AZ | Jul 28, 2009 9:21:57 AM

"The article noted that Gates -- the Harvard scholar who is a leading figure in African-American studies whose arrest at his home has set off a national debate about the way black men are treated by law enforcement."

May we expect a follow up article on his arrest setting off a national debate about the way law enforcement is treated by black men? Will we read something about policing while white?

Posted by: willis | Jul 28, 2009 8:55:17 AM

Obama has Gates' back. He will suffer nothing for corruption that would destroy anyone outside the social "sciences".

Posted by: Ken Hahn | Jul 28, 2009 8:42:57 AM

I think if jail time was pushed on these issues there would be less tax evasiion or misuse of funds with these people. Real jail time not probation. Its what happens in the real world.Just becouse you pay it once you get cought and say your sorry dosent mean a thing.

Posted by: Kevin Colbath | Jul 28, 2009 7:50:26 AM

Don't fall for the framing of this as a "debate about the way black men are treated by law enforcement." This may just as rightly be called a debate about the way law enforcement is treated by black men.

Posted by: Mike | Jul 28, 2009 7:41:03 AM

I assume that this is some kind of non-profit foundation with a tax exemption.

If your two largest grants are to your friggin secretary and fiancée, doesn't that make you prima facie not such a foundation? In at least some countries this 'foundation' would be fiscally irrelevant (civil law countries) or a deemed taxable trust estate (some common law countries).

Posted by: Patrick | Jul 28, 2009 7:31:14 AM

Shannon Love, I think it,s an African Studies thing, you know the communal, tribal system of i'll scratch your fiance if you scratch my fiance.

Posted by: bl | Jul 28, 2009 7:11:36 AM

Isn't there a substantial self-dealing issue here?

Posted by: JohnF | Jul 28, 2009 6:40:52 AM

There seems to be a lot of this mutual back scratching in these grant supported non-profits. Gates recuses himself from his vote on his fiancee but did Higginbotham? When Higginbotham's grant came up Gates voted on her grant. It looks like a you vote for the grant I recuse myself from and I'll vote for the grant you recuse yourself from.

I think the governance of these grants needs more scrutiny and oversight.

Posted by: Shannon Love | Jul 28, 2009 6:33:18 AM

Are there any FOO's (Friends Of Obama) without tax problems?

I think Nancy Pelosi ought to work a little faster on draining that swamp.

Posted by: Mumblix Grumph | Jul 28, 2009 6:26:05 AM

Should a Bearcat really comment on this?

-Miami Redskin '86

Posted by: alppuccino | Jul 28, 2009 6:12:01 AM

Does any Democrat pay taxes?

Posted by: Gerry | Jul 28, 2009 6:03:10 AM