Our Successful US Tax Court Case Underscores Our Unique Mission
"build it, they will come"
As our tax case dealt with what one commentator called “elusive, subjective and difficult tax doctrines”, below we summarize the key points of the case, which underscore the uniqueness of this film project.
The Result of the Case
The Foundation was initially denied its request for tax exempt status by the Internal Revenue Service (IRS). As a result of this decision, the Foundation brought a petition in the United States Tax Court to overturn this decision.
This action was successful in that it resulted in a Court Decree granting the Foundation its tax-exempt status. The IRS agreed to this outcome, which applies only to the Foundation and not other organizations.
Our Tax Court case was profiled in a Forbes.com article titled “The Best Tax News of the Year: Aegis for Dreams Wins Tax-Exempt Status”.
A Fight to Make Cultural Impact
Our mission is to tell a story that will make cultural impact. We believe feature films can uniquely do that (the film Field of Dreams, depicted above, certainly did). To date, this powerful means of storytelling has been the sole province of commercial (for-profit) filmmakers – to the exclusion of charitable organizations.
We tested that premise.
IRS has an important job in the world of charitable organizations: it must ensure that only those organizations which are truly charitable are granted tax-exempt status. Even one non-charitable aspect or activity can be disqualifying. The IRS must carefully scrutinize how would-be charities propose to operate. This is especially true in a case like ours – outside the norm to say the least: producing a feature film in a charity. That may be unprecedented.
The IRS pushed back.
After some modifications to our application — including the Donor’s immediate and unconditional grant of perpetual feature film rights to the Foundation — the IRS agreed to grant tax-exempt status. The Foundation was pleased not only with this result, but also that the IRS Chief Counsel’s Office’s was willing to work collaboratively with us to reach the result.
It’s been a long road.
This process was not swift – it took nearly three years from start to finish, tacked on to the five years of the story’s development. Our willingness to take these steps is testament not only to our passion to tell this important story, but also our belief that we have a story worth watching – hopefully over and over again.
We Secured the Right to Make the Film. Now What?
If this film is made, it will be due to the generosity of those foundations and philanthropic individuals who appreciate the importance of the story told in Aegis for Dreams.
In considering to fund this film, it is important to understand the uniqueness of this opportunity; that is: (1) to tell a story about our Founding (2) with historical accuracy (3) in the most culturally impactful format (a feature film).
On the “unprecedented” scale, this is essentially the film equivalent of a trifecta.
To fully appreciate the point, consider what it would take a charitable organization to replicate our position. In taking this measure, two words come to mind: “time” and “money” probably best measured in years and millions of dollars. Even then, would it be a quality film worthy of watching?
The Risks We Don't Take
There are few activities in this life that are without risk. Filmmaking (both documentaries and features) certainly has its share of risks. For those seeking to make a profit from a film, there are heavy financial risks (and bad odds).
In evaluating risk, it is instructive to weigh related risks against each other. For example, funding research for a disease with no cure could theoretically be called risky; the failure to fund a cure increases the risk there will never be a cure.
That dynamic exists in this film project. Our tax case underscores the point that charitable foundations — who must give only to qualified charities — have likely never been asked to fund a charitable feature film project.
Doing something for the first time is often uncomfortable, and seemingly risky. However, the risk of funding this film should be weighed against the existential risk of a public uninformed about its history. There is an old adage we think is apt to our film project:
“Sometimes the biggest risks are the ones you do not take.”