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LAMW' O'FFICES MARTIN, WHITFIELD, SMITH & BEB'CHICK 1i70!li P'EN'NSYiVANIA AVENUE, N. W. WASHINGTON, O: C. 20006 G~~.U:Y~ MAR.TI~N. . DAVID S. SMITH LEONARD N. BEBCwiCx JOH'~N~ T. TANSEY~ PATRICIA~. NORAN~ LAT~MIIM JO'S'~.EPM~ M:.M'CMANUS~ JOHN W. COTTON November 14, 19'80 Charles Z. Wick, Chairman Robert K. Gray, Chairman. Inaugural Committee'1981 Gentlemen: TEL. (~202) 2~9~.8'-6~.75:0~ CA©LE.'MAnoEU" IT.T'TELCxi sa.002W COUNS;L JA~M~~E~S W. WiwiE~. ~ ALLE.N w"iTrili JAMES L.:KUNCN~. F~R~~AN~K. L. WISWALL,.JR:~ You have asked!wh'ether paymen'tsbybanks and corpo' ations~ to the Guarantee Fund now being established'by the Finance Committee of the Inaugural Committee, appointed'pursuant to Chapter 30, 3'6 Ui. S.C'. ,§ 1-1201, Title I, Chapter 12', District of Columbia Cod!e', may be prohibited under the laws of the United States, and, furthier, in the event that part or all of such payments cannot be'returned as contemplated, whether there will be available tola bank or c~orporation a deduction,fromgross'income'for such unreturned amount under the provisions of the Internal Revenue Code of 1954. We have concluded that banks and corporations are not prohibited from advancingifunds to the Inaugural Committee', and tha , in the event the funds are not repaid in full, a bank or corporation may be entitled to a de- duction under the Code.. The sole function of the "Inaugural Committee'" is to make arrangements and provide for the'Presidential inaugural cere- mony and the functions and activities connected therewith. It is a bipartisan committee serving a public or civic function' and'not a partisan political purpose. In seven of the last eight inaugurations, the Committee has been able to repay all ad!- vamces made to it. As is traditional, funds.in excess of e.Y- penses and advances will be contributed to charity. The Federal Election Commission has ruled that advances and contributions to inaugural committe'es are'not political contributions and may be'made by corporations and national banks. OR 838 (November 23, 19'76)' .'A deduction fromig'ross in- come' otherwise proper under § 162', § 165(g), S 166, , or other -sections of the Code wouldinot be'disallowed as a debt owed by a political party under §' 2'71, nor as aniindirect conitribution to a political party of the kind listedi in S 276. :'' flacri rl CZ Cmi'f`h « ~ Vice Ci6airman, Finance Convnittee Inaugural Committee 1981

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