May 27, 2025
Defending Education is a nationwide, nonpartisan membership organization comprised of parents and students. We write to respectfully request that the Internal Revenue Service open an investigation into the Thomas Jefferson High School for Science and Technology Partnership Fund, Inc., (the “Fund”), EIN 54-1964039.
An investigation is warranted because the Fund appears to have generated at least $3.6 million in revenue through a series of business arrangements with foreign entities that are unrelated to any purpose listed in Section 501 (c ) (3) of the Internal Revenue Code. For instance, the facts strongly suggest that the Fund operated as a pass-through to sell the intellectual property of Thomas Jefferson High School (“TJ”)-America’s premier public high school and a legally distinct entity-to organizations linked to the Chinese government, in exchange for capital improvement funding for the school. The facts also suggest that the Fund entered business contracts with those same organizations to provide public employees to help them “clone” TJ and establish identical state-sponsored schools in China. In return, the organizations provided additional funds that were allocated for renovations to TJ. The Fund reported all this revenue as tax-exempt income related to “charitable” purposes in the 990s it submitted to the IRS. And although the Fund claims to be “separate and independent” from TJ, the beneficiary of these arrangements, the Fund uses TJ’s office space, email accounts, administrative services, and other operational resources.
At a minimum, these facts raise the troubling prospect that the Fund failed to pay taxes on business income that was unrelated to its stated charitable purpose; violated the private benefit doctrine by diverting resources and giving intellectual property to entities with no relationship with its stated mission; filed inaccurate tax-exempt reports with the IRS; and improperly used public resources for non-charitable purposes.
I. Factual Background
Thomas Jefferson High School for Science and Technology has long been recognized as the nation’s best public high school for math and science.2 TJ is a magnet school in Alexandria, Virginia, that is part of the Fairfax County Public Schools system (“FCPS”). In 1999, alumni and parents of current TJ students established the Thomas Jefferson High School for Science and Technology Partnership Fund as a 501(c)(3) tax-exempt organization. As laid out in its articles of incorporation, the Fund’s purpose was to “establish and maintain a self-sustaining fund to fulfill the ongoing needs of the educational programs of [TJ].” 3 The articles of incorporation further specified that the Fund was “organized exclusively for educational and scientific purposes.”
The Fund’s annual Form 990 submissions state that “[i]n accordance with the Partnership Fund’s Articles of Incorporation,” the Fund has “three areas of focus: (1) maintenance of the academic excellence of [TJ], (2) promotion of stem education and outreach across [TJ] communities, and (3) expansion of [TJ] alumni engagement.”5 According to the Fund’s website, it pursues these goals primarily by “raising funds and donating them directly to the school through grant requests and other initiatives.”6
TJ and the Fund describe themselves as separate entities, but their operations substantially overlap with one another. Internal documents and communications obtained by Defending Education through Virginia FOIA requests show that TJPF employees have access to a host of taxpayer-funded tools: including operational services, HR resources, official “fcps.edu” email addresses, a business phone linked to the school district, office space on TJ’s campus, and office resources. See, e.g., Ex. A; Ex. B; Ex. C; Ex. D. An email sent by a Fund employee shows the Fund arranging onboarding activities for one of its new staffers with a TJ administrator, who coordinated standard FCPS procedures like fingerprinting, a background check, and obtaining an access badge for the new staffer. See Ex. B.
In spring 2013, TJ announced an ambitious renovation project that included large-scale structural, aesthetic, and technological changes to the school’s facilities7 and would cost more than $8 million to complete.8 The plan called for renovations to be finished by fall 2016.9 In June 2013, the Partnership Fund launched a fundraising drive called “Campaign for TJ.”10 “The campaign was established to raise money for the TJ renovation project.”11 Shortly thereafter, the Fund commenced its financial relationships with Chinese institutions.12
2014-2018 contracts with Ameson Foundation and Tsinghua University High School. In April 2014, TJ’s then-principal, Evan Glazer, emailed TJ’s faculty stating, “I wanted to alert you this week 4/17 and 4/18 the Thomas Jefferson Partnership Fund (TJPF) signed agreements with Ameson Foundation and Tsinghua University to provide professional development and support in their efforts to build STEM
programs.” Ex. F. Both organizations have “deep ties to the CCP” (Chinese Communist Party).13 Ameson’s founder and Executive Vice Chair, Sean Zhang, “is tied to the CCP’s United Front Work Department,”14 which is a department of the Chinese government that Congress has concluded “reports directly to the CCP’s Central Committee.”15 Tsinghua University High School (“Tsinghua”) is an elite, public secondary school run by the Chinese government that provides a pathway to the prestigious government university after which it is named.
TJ’s agreements with Ameson and Tsinghua spanned four years, from 2014 to 2018. Contemporaneous documents largely focused on the benefits the arrangement would provide for the Chinese entities. For instance, a 2014 newsletter from the Fund proudly stated that the partnership would “allow TJ to share best practices to assist them as they (Tsinghua University High School) develop their own STEM models.
These relationships help to fulfill a long-term goal of the school, that of sharing TJ’s uniquely successful approach to teaching science and technology with other schools in order to expand educational opportunities for students, no matter where they reside.”16 The newsletter also stated that “Chinese educators, concerned that their educational system’s emphasis on speed and memorization over discussion and debate may not produce tomorrow’s most successful students, are increasingly eager to adopt the best instructional models from abroad.”17 The Fund’s newsletters and annual reports listed
the Chinese entities as “international partners” and “donors” to the Campaign for TJ18 See Ex. G at 12. Ex. H at 8.
Tsinghua contributed $300,000 to the Fund soon after the terms of the “partnership” were finalized, see Ex. G at 1, and it made identical contributions in each of the next three years.19 In all, TJ received $1.2 million from Tsinghua University High School and $900,000 from the Ameson Foundation from 2014 to 2018. In return, the Fund gave the organizations literal and metaphorical blueprints for creating identical versions of TJ in China. The documents from the Fund included TJ’s curriculum, course syllabi, lab photographs, thumb drives containing student research projects, and even its floor plans. E.g., Ex. J. The Fund added TJ watermarks to the documents to assure their foreign partners of their authenticity. See Ex. K; Ex. L. In a January 2018 email, TJ’s director of student services summarized the information as a “How to Clone [TJ] Handbook.” Ex. M.
The Fund also hosted site visits from Chinese officials, which it used TJ personnel and other resources to conduct. “During such visits, TJ staff were asked to speak with, host, and present to Chinese officials.”20 See Ex. N. According to a March 2015 article in the Fund’s newsletter, the first site visit took place in February 2015, just months after the agreements were signed. Tsinghua officials received “an intensive introduction to [TJ’s] unique approach to high school education” from “a broad cross-section
of TJ faculty and staff” over the course of “eight very full school days.”21 At the end of the article, the Fund mentions in passing that “[a]s part of [the Fund’s] agreement with [Tsinghua], TJ faculty and staff may also travel to Beijing during school breaks. In addition, [Tsinghua] has made a significant contribution to the Campaign for TJ.” Ex. O. The agenda for a February 2017 site visit called for TJ teachers to give the delegation “a tour of [TJ’s] campus” and a presentation that provided an “overview of TJ organization, operation and management, admin framework, [and] division leadership,” an “overview of teacher evaluation,” and an “overview of TJ admissions.” Ex. N at 3-5. In the words of the Fund’s Manager for Outreach and Partnerships, the services rendered to the foreign entities included “extensive advise [sic] on how to manage a school like TJ.” Ex. M.
Documents obtained by Defending Education give the appearance of negotiated fee-for-services transactions. See Ex. I (“They have said they would make a donation to [the Fund] for this seminar and time at TJ.”). In an email from the Fund’s then executive director Aristia Kinis to the director of TJ’s neuroscience lab, Kinis stated, “[t]o be clear, the [Fund] is not trying to disrupt the school or inconvenience [teachers], we’re just trying our best to maximize revenue for the school based on our campaign needs and the current group of interested donors. I did my best to structure the most beneficial deal that was feasible, given the interest in the ‘marketplace’ and the situation with FCPS.” Ex. E at 2.
2016-2021 contract with Shirble HK. The Fund negotiated a contract with a third Chinese entity, Shirble HK, in 2016. Shirble HK, also known as Shirble Department Store Holdings, is limited liability company that was incorporated in the Cayman Islands in November 2008.22 Shirble’s website, which has since been taken down, stated that the “[c]ompany and its subsidiaries (collectively, the ‘Group’) are principally engaged in department store operations, property development and provision of property development consulting services in the People’s Republic of China (the ‘PRC’).”23 From 2016 to 2021, the Fund—through TJ—appears to have provided intellectual property and consulting services to Chinese officials in largely the same the way that it did under its contracts with Tsinghua and Ameson. For instance, the Fund paid TJ teachers by the hour to draft summaries of their courses, including “the curriculum design/pace of the year, equipment/books/materials needed, class layout, and possible student projects/paper topics for [Shirble’s] own version of the classes.” See Ex. P. During that period, Shirble HK gave the Fund $1.5 million.
Contemporaneous emails sent by TJ officials and Fund employees describe their arrangement with the foreign entities as a contractual business agreement in which TJ— a public institution—was required to provide certain deliverables in exchange for the payments that the nonprofit Fund later characterized as charitable “donations.” For example, a 2018 email sent by TJ’s assistant principal stated that “PF [Partnership Fund] has a contract with Ameson that they will pay $1M in exchange for help in getting their schools up and running in China. Called the Thomas Schools.” Ex. Q (emphasis added). A 2017 email sent by a Fund employee similarly stated, “[p]er our contract with Tsinghua University High School, we are required to send two educators to them for a week.” Ex. R (emphasis added); see also Ex. R (February 2, 2018, email stating “[t]his is the last year of our current contract with [Tsinghua]” (emphasis added)). Those “educators” appear to have come from TJ, as there are no “educators” among the eight employees listed on the Fund’s 990s. Neither the Fund nor TJ has publicly explained how the nonprofit, which FCPS insists is “a separate and independent 501(c)(3) entity, which is not overseen by FCPS,”24 could contractually bind the school to provide consulting services to third parties. Nor have they explained “by what authority [the Fund], operating as an independent nonprofit, handed over the intellectual property of a legally distinct public high school.”25
Although the Fund executed independent contracts with each of the three entities, documentary evidence shows that the foreign organizations viewed their agreements as components of a broader arrangement and that the Fund and the TJ officials involved likely shared that understanding. Ameson’s founder Sean Zhang said the 2014-2018 arrangement was the “beginning to our seven-year collaboration” with TJ. Because Ameson only had a four-year agreement with TJ, Zhang’s reference to a
“seven-year collaboration” only makes sense if one views Ameson’s contract as the beginning of the “collaboration” and Shirble HK’s 2016-2021 contract as the collaboration’s conclusion.
II. Legal Analysis
The facts described above may constitute several grounds for the IRS to issue a finding of noncompliance and revoke the Fund’s tax-exempt status under Section 501(c)(3). The Fund’s business activities and related tax reporting are difficult to reconcile with federal laws and regulations regarding taxation of unrelated business income earned by 501(c)(3) organizations; the requirement that 501(c)(3) organizations operate within the scope of their stated mission and exclusively for charitable, educational, or other exempt purposes; and tax-exempt organizations’ duties to file accurate and complete annual reports with the IRS and to avoid the misuse of public funds.
Failure to adhere to charitable purposes. The tax code requires 501(c)(3) organizations to operate exclusively for charitable, educational, or other exempt purposes and to adhere to the purposes outlined in their articles of incorporation. See 26 U.S.C. §501(c)(3). Violations of this requirement inherently jeopardize the organization’s tax-exempt status. Indeed, “[t]he presence of a single non-exempt purpose, if substantial in nature, will destroy the exemption.” Orange Cnty. Agr. Soc., Inc. v. Comm’r, 893 F.2d 529, 532 (2d Cir. 1990).
An organization violates this rule whenever it confers benefits to private entities, unless those benefits are incidental to activities that further the organization’s core purpose. Unlike the private inurement doctrine, which applies only to benefits conferred upon shareholders or insiders at nonprofit organizations, the “private benefit doctrine” applies to unrelated activities undertaken for the benefit of any third party. Thus, any benefits provided to Ameson, Tsinghua, and Shirble implicate the private benefit doctrine.
Furthermore, the Fund’s contracts with Ameson, Tsinghua, and Shirble are plainly “substantial.” Orange Cnty. Agr. Soc., Inc., 893 F.2d at 532. In 2018, Shirble and the Ameson Foundation were the Fund’s two largest sources of revenue. Moreover, the nature of the arrangements raises serious doubts that the benefits conferred upon the foreign entities were “incidental” to a proper purpose. Take the consulting services envisioned by the contracts, for instance. Giving someone “extensive advice,” Ex. M, usually is not considered a mutually beneficial transaction in the business sense. If the Fund had executed agreements to conduct an exchange program where foreign students and TJ students visited each other’s institutions and learned from one another, then any benefits received by the foreign students or foreign schools might properly be considered “incidental” to the Fund’s primary purpose of furthering the education of TJ students.
Likewise, if the agreement contemplated an exchange of expertise between TJ administrators and their foreign counterparts, any benefit conferred upon the latter might appropriately be viewed as incidental to the main goal of improving the education TJ provides to its students. But, as described above, no such exchanges of expertise occurred. To the contrary, the Fund stated that the animating principle of its engagement with the Chinese-linked entities was “to expand educational opportunities for students, no matter where they reside.”26 Although the Fund depicted that objective as consistent with its “long-term goals,” its articles of incorporation and Form 990s suggest otherwise. The Fund was “organized exclusively” to “fulfill the ongoing needs of the educational programs of [TJ].” 27 It was not established to reprise TJ’s playbook in service of generic “educational opportunities” for unidentified students on the other side of the world—and it certainly was not established to do so in exchange for payment.
Finally, the non-incidental nature of the private benefit is reinforced by the Fund’s deliberate watermarking of TJ documents and intellectual property for “authenticity,” which evinces an intent to ensure their usability by the Chinese entities who received them.
Unrelated business income. The tax code’s rules on unrelated business income earned by tax-exempt organizations parallel the law’s requirement that 501(c)(3) organizations adhere to their stated charitable purposes. 26 U.S.C. §512 requires tax-exempt organizations under Section 501(c)(3) to pay taxes on any income generated from business activities that are unrelated to organization’s tax-exempt purpose. Organizations that ignore these requirements can be forced to pay excise taxes and can
also be stripped of their tax-exempt status entirely. See 26 U.S.C. §4958.
Whether the revenue the Fund derived from its relationships with foreign entities is taxable as unrelated business income “depends upon (1) whether [the Fund’s activities were] a ‘trade or business,’ (2) whether [they were] regularly carried on, and (3) whether [they were] substantially related to [the Fund’s] tax-exempt purposes.” United States v. Am. Coll. of Physicians, 475 U.S. 834, 838–39 (1986). The Fund engaged in a “trade or business” when it executed contracts for services and transferred commercially valuable IP to the foreign entities and received revenue from those same entities. See 26 U.S.C. §513(c) (defining “trade or business” to include “any activity which is carried on for the production of income from the sale of goods or the performance of services”). And it “regularly carried on” the business in question through its continuous, seven-year relationship with the Chinese entities.
Thus, the only issue left to resolve is whether the Fund’s business activities in question had a substantial “‘causal relationship to the achievement of exempt purposes (other than through the production of income).’” Bellco Credit Union v. United States, 735 F. Supp. 2d 1286, 1299 (D. Colo. 2010) (citing 26 C.F.R. §1.513-1). Put differently, the Fund properly classified its revenue-generating activities as tax-exempt only if those activities, standing alone, bear any meaningful connection to the Fund’s stated purpose of “fulfill[ing] the ongoing needs of the educational programs of [TJ.]” It is difficult to envision a scenario in which “the needs of the educational programs of [TJ]” are fulfilled by the creation of new schools thousands of miles away from Alexandria, Virginia.
Inaccurate reporting and improper use of public funds. 26 U.S.C. §6033 requires tax-exempt organizations to file accurate and complete annual returns via Form 990. If the Fund’s $3.6 million in revenue from the three Chinese entities should have been treated as taxable business revenue or was otherwise inconsistent with the Fund’s charitable purposes, as outlined above, then the Fund’s repeated characterizations of this revenue as non-taxable charitable contributions provoke significant concern about the Fund’s compliance with Section 6033. Tax-exempt organizations also may not use resources provided by another entity in a manner inconsistent with their exempt purposes. See 26 C.F.R. §1.501(c)(3)-1(d)(1)(ii). If the IRS concludes that the Fund illicitly used its nonprofit status as a pass-through for TJ’s business transactions with Chinese government entities (such as the sale of TJ’s intellectual property), then the Fund’s use of TJ’s resources in furtherance of those activities may run afoul of §1.501(c)(3)-1.
For these reasons, Defending Education respectfully asks the IRS to open an investigation into the activities and tax-exempt status of the Thomas Jefferson High School for Science and Technology Partnership Fund.
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