The topic of tax-exempt status has been much in the news lately—who gets it, what they do with it, and what IRS hoops they have to jump through in order to secure it. In spring 2013, news outlets revealed that the IRS had singled out some conservative and liberal groups’ applications for tax-exempt status under 501(c)(4) for extra scrutiny, sometimes allowing their applications to languish for years. Political wrangling over tax exemption is nothing new. The case of the Charles E. Merrill Trust provides an interesting mid-20th century example of the way political influence was leveraged to change the tax code.
Charles E. Merrill (AC 1908), founder of Merrill Lynch & Company, attended Amherst College for two years. Even though he left before graduating, he remained devoted to Amherst College, attending many reunions and donating large sums of money, including paying the tuition of more than 300 Amherst students during his lifetime, funding the construction of on-campus faculty housing, and hosting the Amherst College Merrill Center for Economics at his estate in Southampton, NY. Merrill was equally generous to Amherst College in his will. In his will, Charles Merrill established the Charles E. Merrill Trust, which would exist for twenty years and distribute his estate (a large portion of which was his personal stake in Merrill Lynch & Co.) to various institutions and charitable organizations.