The New York Attorney General’s Office has ordered Donald Trump’s charity to “immediately cease soliciting contributions or engaging in any other fundraising activities” in New York, following up on reports that it had failed to register with the state as required by law.
You can read the notice of violation, which was sent to Sheri Dillon, an attorney at Morgan, Lewis & Bockius, LLP, here (downloads as a pdf).
A notice on the Attorney General’s website noted, “Despite failing to register pursuant to Article 7-A, the Trump Foundation solicited contributions in New York State earlier this year, in violation of New York law.”
Article 7-A begins, in part, “Every charitable organization, and any charitable organization registered or required to be registered pursuant to article eight of the estates, powers and trusts law, except as otherwise provided in section one hundred seventy-two-a of this article, which intends to solicit contributions from persons in this state or from any governmental agency shall, prior to any solicitation, file with the attorney general a prescribed registration form…” Exceptions to the rule exist, including those charities that receive less than $25,000 from outside donors during the fiscal year (booklet downloads as a pdf).
Trump’s charity, which is a private foundation organized in New York, has federal tax-exempt status. While charitable organizations are granted federal tax exemption from the Internal Revenue Service (IRS), charitable organizations may also be regulated by state law. That’s the case here.
According to the notice, the charity has 15 days to respond with information for the current year as well as any prior years for which reports are delinquent. The notice went on to say that if the foundation fails to stop soliciting and fails to respond, it “shall be deemed to be a continuing fraud upon the people of the state of New York.”
Last month, the Foundation raised eyebrows when it was revealed that it had made a $25,000 contribution to a political campaign group in 2013. When the donation became public, Trump paid a 10% excise tax, or $2,500, to the Internal Revenue Service (IRS). In that case, Trump spokeswoman Hope Hicks told NBC that “[t]his was a minor issue that was brought to the attention of the Foundation and addressed immediately.”
(I reached out to, but have not yet received a response from, the Trump Foundation and Ms. Dillon. I will update as necessary.)