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§ 10.2 CONTRIBUTIONS BY MEANS OF AN AGENTbehalf of the principal and be subject to the principal’s control, and consent bythe agent to function in that capacity. The IRS observed that an agent’s generalfiduciary duties to the principal include the “duty to account for profits arisingout of the employment, the duty not to act as (or on account of) an adverse partywithout the principal’s consent, the duty not to compete with the principal onhis own account or for another in matters relating to the subject matter of theagency, and the duty to deal fairly with the principal in all transactions betweenthem.” 104The tax regulations provide that if a taxpayer unconditionally delivers ormails a properly endorsed stock certificate to a charitable donee or the donee’sagent, the gift is completed on the date of delivery; or, if the certificate isreceived in the ordinary course of the mail, on the date of mailing. 105 In the factsof a revenue ruling, a utility company was authorized by a charitable organizationto act as its agent in receiving contributions from customers of the utility company.106 In appropriate circumstances, a charitable organization may use an agentto perform functions other than receipt of contributions. 107 Although the contractterms setting forth the parties’ rights and obligations are of major importance tothe IRS, all of the facts and circumstances must be considered in determining theexistence of a principal-agent relationship. 108In connection with a property donation program reviewed by the IRS, a charitableorganization desired to appoint a company as its agent for the purpose ofassisting the charity in the solicitation, acceptance, processing, and sale of personalproperty donated by the general public. The agency looked primarily tothe terms of a proposed contract between the parties, which, the IRS observed,“clearly purports” to establish an agency relationship pursuant to state law. Theagreement showed that the company would be acting on the charity’s behalf andsubject to its control in the general performance of the activities. The amount ofdiscretion that the company was to exercise was said not to be in conflict with anagency relationship. The charity was, and was to remain, the equitable owner ofthe property until an authorized sale occurred. The vehicle titling process wasfound to be in accord with agency treatment; upon the sale of an item of donatedproperty, the proceeds were to become the property of the charity, net of the feepayable to the company. Until a sale occurred, the risk of accidental loss, damage,or destruction of the donated property was to be borne by the charity, subjectto the company’s obligation to pay the cost of insurance coverage. Thecompany was to provide monthly accounting reports to, in a form and in detailsatisfactory to, the charity. The company was to provide weekly advertisingreports to the charity. The charity reserved the right to audit and inspect thecompany’s property donation program financial statements at any time duringnormal business hours. The IRS held that if the actual course of dealing betweenthe parties was in accord with their written agreement, there would be a valid104 Priv. Ltr. Rul. 200230005.105 Reg. § 1.170A-1(b). See § 6.5, text accompanied by note 31.106 Rev. Rul. 85-184, 1985-2 C.B. 84. See § 10.9, text accompanied by notes 185–189.107 See, e.g., Kaplan v. Commissioner, 43 T.C. 663 (1965) (case describing property donation program operatedby for-profit corporation on behalf of charitable entity; issue of agency was not raised).108 See, e.g., State Police Ass’n v. Commissioner, 125 F.3d 1 (1st Cir. 1997). 369