Utah Senator Orrin Hatch (R) recently sent a letter to IRS Commissioner John Koskinen. At the heart of the issue raised by Senator Hatch was his concern that many private museums should not receive 501(c)(3) tax-exempt status. Much of his reasoning seems to indicate a lack of understanding in regard to many of the smaller museums that dot the landscape of the United States. While not major tourist attractions, these museums do much to help preserve the history of a particular segment of our past. Many may not have wide appeal, but there frequently are a small cadre of dedicated adherents. I will, however, be the first to admit that 501(c)(3) tax-exempt status may be abused by an individual seeking to shield his hobby from any tax consequences while generating a revenue stream or other tax benefits. But don’t penalize all small museums due to a few bad apples.
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