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[[underlined]]Smithsonian Tax Matter[[/underlined]]

Mr. Ripley reported that as an additional step in the Institution's continuing efforts to clarify the federal tax status of any net revenues from advertising in the Magazine, a ruling request was submitted to the Internal Revenue Service on November 1, 1977, to determine the proper method of computing this tax ("unrelated business income" tax) under the present IRS regulations as applied to current figures for the operations of the Institution and its Magazine. Should the ruling be favorable, it would appear that no tax would be due for some years to come, even if the Institution were deemed subject to the tax. Further action on the basic question whether the Institution is exempt from federal income tax will be taken in the light of the response of the IRS to this ruling request. It was mentioned that Dean Griswold was advising the Smithsonian in this matter.