Even a charitable organization the donor fully controls must follow regulations on its activity. Surely some people use their foundations as personal piggy banks, but that’s fraud and is pursued as such.

It’s like a conservation agreement. The land (wealth) remains in control of the owner, but the state gets some say in its use and the public benefits. Abuse of the the system is a case for stricter enforcement; sanctioned but objectionable uses are a case for stricter regulations

Yes, but these regulations are not well policed. They effectively take the accounting books provided at face value.

It's almost never investigated, and there is, in the normal course, so much overlap between expenses that benefit ME as a person, and ME as the owner of the charity.

Travel is a big one, for example.

This type of misbehavior is widespread, too. These foundations are not limited to the ultra wealthy. Tons of even moderately rich people (say, tens of millions in wealth) take advantage of these vehicles. Pumping their income into "charity" where charity is not Habitat For Humanity, but "MR JOHN B ENTREPRENEUR CHARITABLE FOUNDATION LLC". The foundation is run within a millimeter of the law, and basically funds the owner's lavish lifestyle tax-free. It's such an obvious scam but since it's just barely legal, nobody bats an eye. And if anyone questions the practice, you have people coming out of the woodwork saying "why are you against charities like Habitat For Humanity?"

Probably a fair complaint. I’d question whether enough people with foundations take bald-face risks with enough of the assets to be relevant to tax policy.

More pedestrian stuff (eg expensing a conference in Seychelles) definitely slips through, but we could make the same principal-agent complaint about business expenses or other settings where one person gets to spend money from different buckets that are taxed differently.

I’d challenge the notion that the rules are unenforced though - someone will have questions if you’re living in a house your foundation purchased or somesuch. At the very least several people with an obligation to know better and much less to lose we’re going to be very nervous.

> Even a charitable organization the donor fully controls must follow regulations on its activity.

Conversely, even a charitable organization not run by the donor may be heavily influenced by a disproportionate donor such that it is de facto controlled by them.

So they get to set organizational policy, but still can’t compel the organization to do illegal things (like route the donors money back to them tax-free)

>but that’s fraud and is pursued as such.

Our former president would beg to differ

Sadly true, though he did get get sued by the NYAG and in settlement agreed to a raft of restrictions on his charitable service, as well as the closure of the foundation and return of $2m in misused funds[0]

[0]:https://ag.ny.gov/press-release/2019/donald-j-trump-pays-cou...

Howard Hughes Medical Institute - In 1969, Representative Wright Patman "complained that the Hughes foundation was a tax‐evasion device," noting that the institute spent only $5.7 million for its operations between 1954 and 1961, a period during which Hughes Aircraft accumulated $76.9 million in profits. By 1975, it had also avoided certain stipulations of the 1969 reform act for charitable institutions due to legal filings by Hughes to change its operational status, with his objections going directly to the White House.

https://en.wikipedia.org/wiki/Howard_Hughes_Medical_Institut...

It seem like a good loophole for the rich to have control on where their charitable money goes to and do what. you can argue the Gates foundation is the same but Bill Gates actually doing some goods with his charitable organization like someone else said, if the charity is being use like a little piggy bank for the rich then its a crime.

Seems like laws already exist around legitimate charitable institutions. If those aren’t being enforced now, what makes you think new laws will be?

If the existing laws are not enforced, maybe it's time to remove, or at least rethink the exemptions then?

That doesn’t follow in the least.

Are you saying we should reconsider the ban on felons buying firearms because the law isn’t enforced?

Either that, or change the law so that it becomes enforceable, or spend more resources on enforcement. If the law is enforced in, say, 1% cases, why is it even there? Most people who break it face no consequences, and it has a potential to be a tool to unfairly target people ("we want to destroy you so we will find a law that you're breaking that is normally not enforced and lock you away for that").

As for the specific example, yes, I think felons that served their sentence should have their full rights restored.

Nice dodge with your last paragraph.

Unintended, can you explain why you think I dodged the question? My assumption was that felons are either in prison, or served their time.

Not a tax lawyer but I'm pretty sure there are regulations around what it means to be a charitable organization according to the IRS.

For instance, I'm fairly certain that using the money in a way that provides you a tangible benefit is verboten, as is taking a deduction for a "donation" to said charity that results in a tangible benefit.

Whether these things are enforced or violated is another question; but it does not seem reasonable to assume that every such organization operates by fraud, nor that getting rid of all of them would be no loss.

Here's a simple suggestion:

You can't make a charitable donation to an organization created after you were born, or created by an ancestor. It's not perfect, but it's a sharp line in the sand, and prevents bullshit like the Bill and Melinda Gates Foundation.