Jump to content

Who is a goverment organization

Guest pbd

Recommended Posts

Can any one define a goverment organization. In this day and age there seems to be a lot of gray areas, Hospitals, senior centers, mental health organizations, Amtrack, etc..

Is it

Taxing authority

Elected oficials

Board appointed by State, County, City, etc.

Goverment funding - total - partial


Link to comment
Share on other sites

Look at authority and cases under section 103 of the Internal Revenue Code. Factors such as ability to tax, power of eminent domain and police powers are considered. An entire legal specialty has grown up around making judgments about whether or not an entity is governmental and what powers it has. You won't get a simple definition that will answer the question in a grey situation.

In the qualified plan area, the IRS issued Rev Rul 89-49 to set a standard for what constitutes an instrumentality of a government unit, but the application of the ruling is not always easy. The Department of Labor's views can be slightly different from those of the IRS.

Link to comment
Share on other sites

Rose v. Long Island R. Pension Plan, 828 F.2d 910 (2d Cir. 1987), cert. denied, 485 U.S. 936 (1988), discussed whether a plan operated by the Long Island Railroad Company ("LIRR") should be treated as a governmental plan. The LIRR was chartered in 1834 as a private stock corporation, the purpose of which was to provide freight and passenger service to Long Island. In 1966, all of the LIRR's outstanding stock was acquired by the Metropolitan Transportation Authority ("MTA"), which converted the LIRR into a public benefit corporation. In determining that a plan operated by the LIRR was a governmental plan, the court relied on a six-factor test originally set forth in Revenue Ruling 57-128, 1957-1 C.B. 311, as follows:

[*]whether it is used for a governmental purpose and performs a governmental function;

[*]whether performance of its function is on behalf of one or more states or political subdivisions;

[*]whether there are any private interests involved, or whether the states or political subdivisions involved have the powers and interests of an owner;

[*]whether control and supervision of the organization is vested in public authority or authorities;

[*] if express or implied statutory or other authority is necessary for the creation and/or use of such an instrumentality, and whether such auth]ority exists; and

[*]the degree of financial autonomy and the source of its operating expenses.[/list=1]

The Department of Labor also in theory follows the same test. See Advisory Opinion 94-02A. However, because different people with different objectives are applying it, in practice the DOL interpretations have sometimes been different than the IRS ones.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...