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Tax Questions, Bickering Mar Fund Disbursement With PM-Another Look-Massacre

July 15, 1985

SAN YSIDRO, Calif. (AP) _ An unfavorable tax ruling and bickering among beneficiaries have clouded the future of a million-dollar fund set up to aid survivors of the San Ysidro- McDonald’s massacre.

In the year since the July 18, 1984, rampage, more than $400,000 has been disbursed to bury the dead, pay medical costs and settle property losses, according to James Lanas, president of the three-member board governing the fund.

Twenty-two people, including gunman James Huberty, were slain in the attack. Twenty were wounded.

About $1 million remains in the San Ysidro Family Survivors Fund, half of which has been invested in U.S. Treasury bills with the rest in interest- bearing accounts at five banks, Lanas said.

Last month, the Internal Revenue Service denied the fund tax-exempt status, meaning the fund and people receiving money from it may be taxed. In addition, contributors may not claim tax deductions.

The IRS said the fund benefited too select a group, said attorney Robert Buell, the fund’s tax lawyer. Lanas said the fund would appeal the ruling.

″The IRS is not here to put an end to organizations trying to help people, but we do have to enforce the IRS code as Congress wrote it,″ said IRS spokesman Robert Giannangeli. ″We don’t have the leeway to say ’that’s a fine cause so we’re going to grant tax-exempt status anyway.‴

Uncertainty over the fund’s future and bad feelings created by the varying amounts already disbursed have dismayed some of the ″core victims,″ said Andrea Skorepa, director of Casa Familiar, a social service agency evaluating victims’ needs. Payouts to those people wounded in the attack and relatives of the dead were based on Casa Familiar recommendations.

Perhaps half a dozen families have complained about what they considered paltry compensation for their losses in comparison to what was given to other survivors, Skorepa said.

The relief fund was started the day after the massacre when Joan Kroc, chairman of the McDonald’s Corp., donated $100,000. McDonald’s added $1 million, and smaller contributions from more than 4,000 individuals and businesses throughout the nation brought the total to $1.4 million.

The IRS ruling is preventing administrators from mapping long-range plans. The administrators want to set up a blanket trust for minors who were wounded or who lost at least one of their parents and to put aside money for those with continuing medical costs.

Giannangeli said if the fund broadened its scope, it could qualify for tax- exempt status. But Lanas said administrators have ruled that out.

″The money was donated to that fund for the victims,″ Lanas said. ″We started off that way and we’re going to end that way.″

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