The Federal Tax Exemption Aspects of Law Schools Running Their Own Law Firms

Colombo, John D.

doi:10.2139/ssrn.2272057

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The Federal Tax Exemption Aspects of Law Schools Running Their Own Law Firms

Illinois Public Law Research Paper No. 13-46

16 Pages Posted: 1 Jun 2013 Last revised: 12 Jul 2013

See all articles by John D. Colombo

John D. Colombo

University of Illinois College of Law

Date Written: May 30, 2013

Abstract

A current hot topic in legal education is the law-school-sponsored law firm. Bradley T. Borden and Robert J. Rhee introduced the idea in a short article published in the South Carolina Law Review and the concept was soon picked up by articles in the National Law Journal, the ABA Journal and others. The purpose of this essay is to explore the federal tax-exemption and UBIT questions raised by the law-school-sponsored law firm. I conclude that a law firm operated as a single-member LLC with the sponsoring law school as the single member offers the best protection for the law school's underlying exempt status, and also should avoid issues with the UBIT.

Keywords: charity, tax-exemption, legal education, UBIT, 501(c)(3)

JEL Classification: L31, L33, L39

Suggested Citation: Suggested Citation

Colombo, John David, The Federal Tax Exemption Aspects of Law Schools Running Their Own Law Firms (May 30, 2013). Illinois Public Law Research Paper No. 13-46, Available at SSRN: https://ssrn.com/abstract=2272057 or http://dx.doi.org/10.2139/ssrn.2272057