As a few folks on the list have pointed out, the IRS does have rules
governing conflicts of interest.  It should be of little surprise that the
rules can be a bit complex, confusing, and even counterintuitive -- yes, a
financial arrangement with a fourth cousin of a board member, given the
circumstances, could possibly be a no-no (not a legal term of art).  AAM has
guidance to help museums understand and navigate these rules that is
available through its bookstore at www.aam-us.org.  Here's the listing from
the AAM bookstore catalogue:

CONFLICTS OF INTEREST: NEW IRS RULES FOR BOARDS, DIRECTORS AND EXECUTIVE
OFFICERS
Gardner, Carlton & Douglas/Independent Sector/Internal Revenue Service/KPMG,
U.S.

New rules establish penalties--and procedures to avoid them--for improper
salaries, compensation and other financial transactions between nonprofit
organizations and the managers who control them.  Conflicts of Interest
groups three reports that offer an explanation of the new rules and how they
affect museums. Know the details of your responsibilities and liabilities.
Required reading for trustees, board members, directors,  financial officers
and other executives of every type of museum.
-- PAPER 62PP. 1998 · NO ISBN · $ 15.00
*******************
Barry Szczesny
AAM Government Affairs
--not an official communication

Barry G. Szczesny, Esq.
Government Affairs Counsel and 
Assistant Director
Government and Public Affairs
American Association of Museums
1575 Eye Street, NW
Suite 400
Washington, DC  20005

202/289-9125 Phone
202/289-6578 Fax
[log in to unmask]  E-mail
http://www.aam-us.org  Website

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