Exempt Organization Execs' Incomes Up In 1992, GAO Reports.
GAO/GGD-95-84BR
- Institutional AuthorsGeneral Accounting Office
- Code Sections
- Subject Area/Tax Topics
- Index Termsexempt organizations, compensation, officers and directorsexempt organizations, social welfare
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 95-2992 (72 pages)
- Tax Analysts Electronic Citation95 TNT 53-8
Nearly 15 percent of the highest paid executives at 46 of the largest social welfare, labor and agricultural, and business organizations earned more than $200,000 in 1992.
This was one of the findings of a General Accounting Office report released February 28 that examined the compensation, revenues, assets, expenses, and other factors relating to tax-exempt 501(c) organizations. The report focused on 3 of the 25 categories of tax- exempt organizations: social welfare, labor and agricultural, and business. Its findings were based substantially on IRS annual reports as well as Form 990 returns filed by exempt organizations.
The GAO reported that of the 673 executives studied, about 23 percent earned between $100,000 and $200,000, 32 percent received less than $100,000, and 29 percent received no compensation. Business leagues led among two compensation levels: those earning more than $200,000 and those who got nothing.
The biggest salary -- $4.1 million -- went to the commissioner of The PGA Tour Inc., a business league. Mutual of America Life Insurance, a social welfare organization, paid its top executive $1.2 million, while the executive director of the Major League Baseball Players Association was the highest paid officer of a labor or agricultural organization, earning more than $900,000.
IRS examinations of social welfare organizations and business leagues have dropped sharply, the GAO reported. Between fiscal 1990 and 1994, examinations of social welfare organizations fell from 816 to 397 and those of business leagues decreased from 1,500 to 874. However, after an initial decline, examinations of labor and agricultural organizations rose from 560 in fiscal 1992 to 828 in 1994.
The report provided no explanation for the drop off in examinations, though it cited a 1994 House Ways and Means Committee report that recommended increased staffing and funding for IRS examination and compliance activities.
Ironically, though examinations have gone down, taxes and penalties assessed against exempt organizations increased significantly during the same period. Taxes and penalties against social welfare organizations increased from just under $500,000 in 1990 to more than $138 million in 1994. Labor and agricultural organizations faced taxes and penalties of almost $20 million last year, an increase of more than $17 million. Business leagues, though, saw their penalties drop from nearly $4.2 million to just above $1.1 million. Most assessments came from examinations of IRS Form 990T, "Exempt Organization Business Income Tax Return."
Between fiscal 1992 and 1994, the number of social welfare organizations that lost their exemptions declined slightly from 10 to 8, while exemptions were revoked for 14 business leagues in 1994 as opposed to 6 two years before. Under the labor and agricultural category, only two organizations lost exemptions.
The report also found that the number of business leagues is increasing rapidly and bringing in more dollars than social welfare and labor and agricultural organizations.
The GAO found that from 1978 to 1990, the number of exempt organizations increased 27 percent, from 806,375 to 1,022,223. Business leagues posted the biggest gain, 45 percent, while social welfare organizations showed a 14-percent increase. Labor and agricultural organizations, though, declined 18 percent. All three categories were eclipsed by charities, which climbed 67 percent.
Business leagues also showed the most gains in assets. Between 1975 and 1990, assets of business leagues jumped more than 140 percent, from almost $8 billion to more than $19 billion. By contrast, the increases for labor and agricultural and social welfare organizations were 47 percent and 20 percent, respectively. The bulk of the increases for all three categories came from investments in securities.
Similarly, revenues of business leagues rose by nearly 144 percent during the same time, from $7.4 billion to $18 billion. Labor and agricultural organizations saw their revenues rise by a more modest 13 percent, while those of social welfare organizations plunged 47 percent. Program services were the main revenue source for social welfare organizations, while labor and agricultural organizations got most of their income from membership fees. Business leagues raked in more than $7 billion from both sources.
Business leagues also experienced the biggest expense increases, as their costs rose by about 145 percent from 1975 to 1990. For labor and agricultural organizations, the increase was 19 percent, while expenses for social welfare organizations were almost halved. Benefits to or for members, as well as advertising and consulting fees, made up the bulk of expenses.
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TAX-EXEMPT ORGANIZATIONS
INFORMATION ON SELECTED TYPES TYPES OF ORGANIZATIONS
General Government Division
B-260138
February 28, 1995
The Honorable Byron L. Dorgan
United States Senate
The Honorable Harry Reid
United States Senate
Since the mid-1970s, the number and size of organizations that are tax-exempt under Internal Revenue Code (IRC) section 501(c) have increased substantially overall. As of 1992, there were over 1 million of these organizations in existence. /1/
Press reports and congressional hearings have recently focused on the activities of charitable organizations, but other types of tax-exempt organizations have not received this level of scrutiny. As you requested, we (1) determined the growth in the number, assets, revenue, and expenses of social welfare organizations, labor and agricultural organizations, and business leagues, (2) documented the compensation that some of the largest of these tax-exempt organizations paid their executives in 1992, (3) identified the extent to which these organizations can be involved in lobbying and political activities, and (4) identified IRS' efforts to monitor their activities. Information concerning charitable organizations is presented in this report for purposes of comparison.
On February 15, 1995, we briefed you and your staffs on the results of our review. This report summarizes the information presented in that briefing.
RESULTS IN BRIEF
For the most part, the number and size of tax-exempt social welfare organizations, labor and agricultural organizations, and business leagues increased between 1975 and 1990. The changes over this period are illustrated as follows:
o The number of business leagues increased about 45 percent to
65,869, while the number of social welfare organizations
increased about 14 percent to 142,473. Conversely, the number
of labor and agricultural organizations declined about 18
percent to 71,653.
o The assets (in 1990 dollars) of all three types of
organizations increased. Business leagues' assets increased
more than 140 percent to over $19 billion, while those of
labor and agricultural organizations increased about 47
percent to nearly $14 billion and those of social welfare
organizations increased about 20 percent to over $35 billion.
o The change in revenue (in 1990 dollars) varied for these types
of organizations. While revenue for business leagues increased
nearly 144 percent to $18 billion and revenue for labor and
agricultural organizations increased about 13 percent to over
$12 billion, the revenue for social welfare organizations
declined almost 47 percent to $18 billion.
o The change in expenses (in 1990 dollars) for these
organizations also varied. The expenses of business leagues
increased about 145 percent to just over $18 billion and those
of labor and agricultural organizations increased nearly 19
percent to $12.7 billion. Meanwhile, the expenses of social
welfare organizations declined about 48 percent to $17.7
billion.
We analyzed the organizations' 1992 annual returns to determine the compensation for the 5 highest paid executives from 46 of each of the largest social welfare organizations, labor and agricultural organizations, and business leagues, as measured by the organizations' assets. Of 673 executives identified, we found that 100 executives (about 15 percent) received $200,000 or more in compensation for 1992. Conversely, 198 executives (about 29 percent) received no compensation for 1992.
IRS is responsible for monitoring the activities of tax-exempt organizations through examinations of their annual returns. In general, between 1990 and 1994 examinations of social welfare organizations, labor and agricultural organizations, and business leagues decreased about 30 percent, while the amount of taxes and penalties resulting from these examinations increased about 200 percent. IRS also revoked the tax-exempt status of 67 of these types of organizations between 1992 and 1994.
SCOPE AND METHODOLOGY
To identify changes in the number, assets, income, and expenses of tax-exempt organizations, we reviewed IRS annual reports and studies by its Statistics of Income Division. To portray the changes in the real value of the organizations' assets, income, and expenses, we converted the financial information in these reports, which were available for 1975 and 1990, to 1990 dollars.
To determine the compensation that executives received from social welfare organizations, labor and agricultural organizations, and business leagues, we obtained, and analyzed 285 IRS Form 990 returns -- "Return of Organization Exempt From Income Tax" -- filed by some of the largest of these organizations for tax year 1992, the most recent year available at the time of our review. A Form 990 return contains detailed information about an organization's assets, revenue, and expenses, including the compensation paid to its executives. The return must be filed annually with IRS by organizations with gross receipts that exceed $25,000, and must be made available to the public according to the IRC.
As agreed with you, we sought to obtain the Form 990 returns for tax year 1992 from 50 of each of the largest social welfare organizations and labor and agricultural organizations, as well as from 200 of the largest business leagues. We identified these organizations on the basis of the amount of their assets as recorded in an IRS Exempt Organization Business Master File (EOBMF) containing all active tax-exempt organizations as of March 31, 1994. Of the returns we requested, we received and analyzed 46 returns of social welfare organizations, 46 returns of labor and agricultural organizations, and 193 returns of business leagues. IRS was unable to provide the remaining returns at the time of our request. Appendix III lists those organizations for which we received and analyzed a Form 990 return.
Our analysis included an in-depth review of the section of the returns detailing the compensation that the organizations paid to their executives, including officers, directors, and key employees. We defined compensation to include salary; contributions to employee benefit plans, including deferred compensation; and expense accounts and other allowances /2/ reported on the organizations' returns. Appendix I lists the executives we identified who received $200,000 or more from these types of organizations. We also identified any compensation that executives of these organizations received from related organizations. Appendix II lists the executives we identified who received compensation from related organizations.
To determine the rules governing lobbying and political activities for these three types of organizations, as well as for charitable organizations, we interviewed IRS Exempt Organization Division staff and reviewed IRS guidelines, regulations, and the Internal Revenue Code. To identify IRS' compliance efforts related to these organizations, including the number of examinations, the taxes and penalties that resulted from these examinations, and the number of organizations for which IRS revoked their tax-exemption, we interviewed IRS Exempt Organization Division staff and reviewed Exempt Organization Division annual compliance reports.
We did our review from March 1994 through December 1994 at IRS' national office in accordance with generally accepted government auditing standards.
AGENCY COMMENTS
On February 7, 1995, we discussed a draft of this report with IRS Exempt Organization Division officials at the national office. They basically agreed with the information presented in the report and provided some technical comments that were incorporated as appropriate.
As agreed with you, unless you announce the contents of this briefing report earlier, we plan no further distribution of this report until 15 days from the date of this letter. At that time, we will send copies of this report to various congressional committees, the Commissioner of Internal Revenue, and other interested parties. We will also make copies available to others upon request.
The major contributors to this report are listed in appendix V. Please contact me at (202) 512-9044 if you or your staff have any questions about this briefing report.
Natwar M. Gandhi
Associate Director, Tax Policy
and Administration
FOOTNOTES
/1/ Appendix IV describes the types of organizations that are tax-exempt under IRC section 501(c).
/2/ These include expense allowances or reimbursements that recipients must report as income on their individual income tax returns.
END OF FOOTNOTES
CONTENTS
LETTER
BRIEFING SECTION INFORMATION ON SELECTED TYPES OF ORGANIZATIONS
Background on Tax-Exempt Organizations
Social Welfare Organizations -- IRC 501(c)(4)
Labor, Agricultural, and Horticultural Organizations -- IRC 501(c)(5)
Business Leagues -- IRC 501(c)(6)
Charitable, Religious and Educational Organizations -- IRC 501(c)(3)
Number of Tax-Exempt Organizations (1978-1990)
Assets of Selected Tax-Exempt Organizations (1975-1990)
Revenues of Selected Tax-Exempt Organizations (1975-1990)
Expenses of Selected Tax-Exempt Organizations (1975-1990)
Inurement of Benefits
Reasonable Compensation
Executive Compensation Paid by Selected Organizations (1992)
Related Organizations
Lobbying and Political Activities
Tax Deductibility of Contributions, Dues and Membership Fees
Process for Obtaining Tax-Exempt Status
IRS Examinations of Tax-Exempt Organizations (FY90-94)
Taxes and Penalties Assessed Against Exempt Orgs. (FY90-94)
Number of Revocations of Tax-Exempt Status (FY92-94)
APPENDIX I -- EXECUTIVES OF SELECTED TAX-EXEMPT ORGANIZATIONS WHO
WERE COMPENSATED $200,000 OR MORE IN 1992
APPENDIX II -- EXECUTIVES OF SELECTED TAX-EXEMPT ORGANIZATIONS WHO
RECEIVED COMPENSATION FROM RELATED ORGANIZATIONS IN 1992
APPENDIX III -- ASSETS, REVENUES AND EXPENSES OF THE TAX-EXEMPT
ORGANIZATIONS INCLUDED IN THIS STUDY
APPENDIX IV -- CATEGORY AND TYPE OF TAX-EXEMPT ORGANIZATIONS UNDER
IRC SECTION 501(c)
APPENDIX V -- MAJOR CONTRIBUTORS TO THIS BRIEFING REPORT
Abbreviations
COO Chief Operating Officer
EIN Employer Identification Number
EOBMF Exempt Organization Business Master File
GDP gross domestic product
IRC Internal Revenue Code
UAW International Union -- United Auto, Aerospace, and Agricultural
Workers
INFORMATION ON SELECTED TYPES OF ORGANIZATIONS
GAO: BACKGROUND ON TAX-EXEMPT ORGANIZATIONS
[graph omitted]
Background Information on Tax-Exempt Organizations
Internal Revenue Code (IRC) section 501(c) establishes 25 categories of tax-exempt organizations that enjoy many benefits that for-profit organizations do not. In particular, tax-exempt organizations are required to pay federal income taxes only on unrelated business income. They are also exempt from many state and local taxes. In addition, contributions to charities are deductible from donors' federal income taxes.
Charitable, religious, and educational organizations, tax-exempt under IRC section 501(c)(3), and known collectively as charities, are the largest category. In 1990, of a total of 1,022,223 tax-exempt organizations, /1/ charities represented 489,891 (48 percent). Social welfare organizations represented the second largest category of tax- exempt organization in 1990, totaling 142,473 (14 percent). Labor and agricultural organizations ranked fourth, while business leagues ranked fifth, with totals of 71,653 (7 percent) and 65,896 (about 6 percent), respectively. An additional 252,310 organizations (about 25 percent) were exempt in 1990 under the remaining 21 IRC 501(c) categories.
Overall, tax-exempt organizations have grown in number and size since the mid-1970s. Specifically, the total number of exempt organizations has grown about 27 percent, from 806,375 organizations in 1978 to more than 1 million in 1990. Between 1975 and 1990, the assets of these organizations have grown in real terms over 150 percent to more than $1 trillion, and their revenues have grown over 225 percent to about $560 billion, while the growth in real gross domestic product (GDP) for the United States was 52 percent. As of 1990, tax-exempt organizations accounted for approximately 10 percent of GDP in terms of revenue, up from nearly 6 percent in 1975. Charities alone accounted for about 7 percent of GDP in 1990.
This report focuses on social welfare organizations, labor and agricultural organizations, and business leagues, which are tax- exempt under IRC sections 501(c)(4), (5), and (6), respectively. Specific information concerning charitable organizations has been included for comparison purposes.
GAO
SOCIAL WELFARE ORGANIZATIONS -- IRC 501(c)(4)
o Must be organized and operated exclusively for promotion of
social welfare.
o Must promote common good of entire community.
o Examples:
o American Association of Retired Persons,
o Minneapolis Police Relief Association.
Definition and Examples of Social Welfare Organizations
Organizations operated and organized exclusively for the promotion of social welfare, including civic leagues, as well as local associations of employees -- known collectively as social welfare organizations -- are exempt from federal income taxes under IRC section 501(c)(4). The net earnings of such organizations must be used exclusively for charitable, educational, or recreational purposes. An example of an organization operated for the promotion of social welfare is the American Association of Retired Persons. /2/ An example of a local association of employees is the Minneapolis Police Relief Association.
Social welfare organizations must promote the common good and general welfare of the people of the community. Court rulings have further required that a social welfare organization benefit a whole community of people rather than a private group of citizens. For example, in one case the court ruled that a nonprofit corporation formed to acquire and operate a low-cost housing cooperative was not a tax-exempt social welfare organization because, rather than offering a service to the community-at-large, it only provided a service to its members. However, an organization that benefits a private group of citizens can be ruled tax-exempt if it can establish that it also benefits the entire community. For example, IRS has ruled that an organization engaged in the rehabilitation and job placement of its members was tax-exempt because it benefited the community as a whole, even though its membership was limited.
GAO
LABOR, AGRICULTURAL, AND HORTICULTURAL
ORGANIZATIONS -- IRC 501(c)(5)
o Must be organized to:
o improve conditions of persons involved in these fields,
o improve their products, or
o develop a higher degree of efficiency in their
occupations.
o Examples:
o International Union -- United Auto, Aerospace and
Agricultural Workers (UAW),
o Ohio Farm Bureau Federation, Inc.
Definition and Examples of Labor, Agricultural, and Horticultural
Organizations
Labor, agricultural, and horticultural organizations -- known collectively as labor and agricultural organizations -- are exempt from federal income taxes under IRC section 501(c)(5). These organizations must have one or more of the following objectives: (1) bettering the conditions of persons engaged in the pursuits of labor, agriculture, or horticulture, (2) improving the grade of their products, or (3) developing a higher degree of efficiency in their respective occupations. In addition, the net earnings of these organizations may not inure to the benefit any of their members. /3/
IRS defines a labor organization as an association of workers who have combined to promote their interests by bargaining collectively with their employers to secure better working conditions, wages, and similar benefits. These organizations are generally composed of employees or representatives of employees, but may also include employers, self-employed persons, and independent contractors. They may provide benefits to their members or members' families in the event of a strike, lockout, death, accident, or similar occurrence. An example of a labor organization is the International Union-United Auto, Aerospace, and Agricultural Workers (UAW).
IRS uses the term agricultural to cover both agricultural and horticultural organizations. IRS defines agriculture as the art or science of cultivating the ground, including the preparation of the soil, the planting of seeds, the raising and harvesting of crops, and the rearing, feeding, and management of livestock, as well as the harvesting of aquatic products. IRS defines horticulture as the cultivation of a garden or orchard, as well as the art or science of growing fruits, vegetables, flowers or ornamental plants. An example of an agricultural organization is the Ohio Farm Bureau Federation, Inc.
GAO
BUSINESS LEAGUES -- IRC 501(c)(6)
o Must promote a common business interest.
o Cannot be organized for profit.
o Examples:
o American Bureau of Shipping,
o American Medical Association,
o Chamber of Commerce of the U.S.A.
Definition and Examples of Business Leagues
Business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues -- known collectively as business leagues -- are exempt from federal income taxes under IRC section 501(c)(6). Business leagues cannot be organized for profit, and no part of their net earnings can inure to the benefit of any private shareholder or individual. Examples of business leagues include the American Bureau of Shipping, the American Medical Association, and the Chamber of Commerce of the U.S.A.
Treasury regulations define a business league as an association of persons having a common business interest whose purpose is to promote that interest. To qualify for tax-exempt status as a business league, an organization cannot engage in a regular business of a kind ordinarily carried on for profit, even if the business is operated on a cooperative basis or produces only sufficient income to be self- sustaining. Furthermore, the organization must work toward improving the business conditions of one or more lines of business rather than performing services for a particular business.
GAO
CHARITABLE, RELIGIOUS AND EDUCATIONAL
ORGANIZATIONS -- IRC 501(c)(3)
o Must be organized and operated exclusively for exempt
purposes.
o Must benefit the general public.
o Examples:
o Salvation Army,
o American Cancer Society,
o Harvard University.
Definition and Examples of Charities
Organizations operated and organized exclusively for charitable, religious, scientific, testing for public safety, literary, or educational purposes -- known collectively as charities -- are exempt from federal income taxes under IRC section 501(c)(3). Charities must benefit the general public as opposed to benefiting only private individuals or groups. Some activities considered to be charitable include (1) relieving the poor and distressed, (2) advancing religion or education, (3) erecting or maintaining public buildings or monuments, (4) lessening the burdens of government, and (5) eliminating prejudice. Examples of charities are the Salvation Army, the American Cancer Society, and Harvard University. /4/
IRS staff use standards that have evolved over time from both IRS and court rulings when determining whether an organization qualifies as a tax-exempt charity. For example, IRS has determined that an employment agency that operated exclusively to secure employment without charge to the elderly qualified as a charity because it provided services for a segment of the public with limited means. Conversely, IRS has determined that a pharmaceutical service operated by a nonprofit organization was not tax-exempt because, although it provided discount pharmacy services to handicapped and senior citizens, it also provided pharmacy services to the general public. Furthermore, the pharmaceutical service did not provide free or below cost drugs to the poor. As a result, IRS determined that the pharmacy was not operated exclusively for charitable purposes because it was primarily engaged in commercial activity.
GAO
NUMBER OF TAX-EXEMPT ORGANIZATIONS
(1978-1990)
[graph omitted]
Number of Tax-Exempt Organizations (1978-1990) /5/
Between 1978 and 1990, the total number of organizations exempt from taxation under IRC section 501(c) increased from 806,375 to 1,022,223, an increase of about 27 percent. During this period, of the three types of organizations that are the focus of this study, business leagues increased the most, about 45 percent, from 45,325 in 1978 to 65,869 in 1990. Social welfare organizations increased nearly 14 percent, from 125,317 in 1978 to 142,473 in 1990. Labor and agricultural organizations declined about 18 percent, decreasing from 87,531 in 1978 to 71,653 in 1990. By comparison, charities increased nearly 67 percent, from 293,947 in 1978 to 489,891 in 1990, while all other tax-exempt organizations combined decreased less than 1 percent, from 254,300 in 1978 to 252,300 in 1990.
GAO
ASSETS OF SELECTED TAX-EXEMPT ORGANIZATIONS
(1975-1990)
[graph omitted]
Assets of Selected Tax-Exempt Organizations (1975-1990)
Business leagues' assets increased more percentage-wise than those of social welfare organizations and labor and agricultural organizations between 1975 and 1990, in 1990 dollars. Specifically, business leagues' assets increased over 140 percent, from nearly $8 billion in 1975 to more than $19 billion in 1990. Labor and agricultural organizations' assets increased about 47 percent during this period, from $9.3 billion to $13.7 billion, although the total number of these types of organizations declined. Social welfare organizations' assets increased about 20 percent, from $29.3 billion in 1975 to $35.1 billion in 1990.
Investments in securities comprised the single largest asset category in 1990 for all three types of organizations, including social welfare organizations ($7.4 billion), labor and agricultural organizations ($4.6 billion), and business leagues ($6.2 billion).
GAO
REVENUES OF SELECTED TAX-EXEMPT ORGANIZATIONS
(1975-1990)
[graph omitted]
Revenues of Selected Tax-Exempt Organizations (1975 to 1990)
The revenues of business leagues also increased more percentage- wise than those of social welfare organizations or labor and agricultural organizations between 1975 and 1990, in 1990 dollars. The revenues of business leagues increased nearly 144 percent, from $7.4 billion in 1975 to $18 billion in 1990. By contrast, the revenues of labor and agricultural organizations increased about 13 percent during this period, from $10.9 billion to $12.4 billion, while the revenues of social welfare organizations declined about 47 percent, from $33.8 billion to $18 billion.
Revenues from program services and membership fees were the two largest revenue sources for business leagues in 1990, totaling over $7 billion each. Program services are the services provided in carrying out the major objectives of a tax-exempt organization, such as the publication of journals and newsletters. Labor and agricultural organizations received most of their revenues in 1990 -- $7.3 billion -- from membership fees, while social welfare organizations received most of their revenues in 1990 -- $11.5 billion -- from program services.
GAO
EXPENSES OF SELECTED TAX-EXEMPT ORGANIZATIONS
(1975-1990)
[graph omitted]
Expenses of Selected Tax-Exempt Organizations (1975-1990)
The expenses of business leagues increased about 145 percent, from $7.4 billion in 1975 to $18.2 in 1990, in 1990 dollars, while the expenses of labor and agricultural organizations increased about 19 percent, from $10.6 billion to $12.7 billion. The expenses of social welfare organizations declined about 48 percent, from $34.2 billion in 1975 to $17.7 billion in 1990.
Benefits paid to or for members, at $5.7 billion, was the largest expense item in 1990 for social welfare organizations, followed closely by "other" expenses at $5.2 billion. "Other" expenses, which included various items, such as advertising and consulting fees, comprised the largest expense category in 1990 for both labor and agricultural organizations and business leagues at $3.3 billion and $7.7 billion, respectively. The second largest expense for these organizations was salaries and wages at $2 billion and $2.9 billion, respectively.
GAO
INUREMENT OF BENEFITS
o Prohibited for charities, labor and agricultural
organizations, and business leagues.
o Persons can only receive reasonable payment for goods and
services provided.
o Can lead to revocation of exempt status.
o Major determining factor is reasonableness of compensation.
Inurement of Benefits
The Internal Revenue Code prohibits the net earnings of business leagues and charities from inuring to the benefit of any private shareholder or individual, and Treasury regulation section 1.501(c)(5)-1(a)(1) establishes the same prohibition for labor and agricultural organizations. For these organizations, inurement can result in loss of their tax-exempt status. At the present time, there is no similar prohibition for social welfare organizations.
This prohibition generally states that a person can only receive reasonable payment from an organization for goods or services provided. Specifically, inurement exists in several types of circumstances where benefits, such as unreasonable compensation, low or no-interest loans, and personal expenses, flow to an organization's officers, directors, and other "insiders." While there is no absolute measure of inurement, IRS and the courts assess whether the compensation is reasonable for the services provided and if compensation was agreed upon through arms length negotiations.
In a May 1994 report, the Subcommittee on Oversight of the House Committee on Ways and Means concluded that IRS is not appropriately enforcing the current prohibitions on inurement related to its oversight of charities, and recommended that IRS be allowed to invoke an intermediate sanction against any charity that engages in activities resulting in inurement.
REASONABLE COMPENSATION
o Total compensation defined broadly by IRS.
o No absolute limit -- judged on case-by-case basis.
o IRS considers:
o Compensation of executives of similar organizations,
o Executives' responsibilities,
o Whether salary was determined at "arm's length."
Reasonable Compensation
One of IRS' primary measures of whether inurement has occurred is whether compensation paid to an executive is reasonable. For- profit businesses are allowed to deduct from their taxable income a reasonable allowance for salaries or other compensation for personal services rendered. This standard also has been applied to tax-exempt organizations by the courts as one way to determine whether inurement of benefits has taken place.
When deciding whether compensation is reasonable, IRS first must determine the total amount of compensation paid by the organization. Specifically, IRS considers the following to be compensation: (1) salary or wages, (2) contributions to pension and profit sharing plans, (3) unpaid deferred compensation, (4) payment of personal expenses, (5) rents, royalties or fees, and (6) personal use of an organization's property or facilities.
Once IRS determines the total amount of compensation, it then decides whether the compensation is reasonable. IRS has no pre-set limit on reasonable compensation, but judges reasonableness on a case-by-case basis, as do the courts. For example, in one case the courts determined that inurement existed when a college compensated an executive according to a formula based on stock ownership, rather than paying a reasonable amount for services rendered. In another case, IRS determined that a hospital's contract to pay a radiologist a percentage of the gross receipts of the radiology department did not constitute inurement because the agreement was reached through arms length bargaining and the radiologist had no controlling interest in the hospital.
The primary way IRS determines reasonableness is a comparison of compensation paid by similar organizations. IRS also considers the salary history of the individual, his or her responsibilities, the salary scale of employees in general, and the amount of control the individual has in determining his or her own salary.
EXECUTIVE COMPENSATION PAID BY SELECTED ORGANIZATIONS
[figure omitted]
Executive Compensation Paid by Selected Tax-Exempt Organizations
(1992) /6/
In 1992, about 62 percent of the highest paid executives of 46 of each of the largest social welfare organizations, labor and agricultural organizations, and business leagues received less than $100,000 in compensation, while nearly 15 percent received $200,000 or more. Specifically, out of a total of 673 executives, including officers, directors, and key employees, identified on the annual returns these organizations filed with IRS, 198 (about 29 percent) received no compensation, 218 (about 32 percent) received from $1 to $100,000, and 157 (about 23 percent) received from $100,000 to $200,000. There were also 100 executives (about 15 percent) who received more than $200,000 in compensation.
Business leagues had both the largest number of executives receiving no compensation as well as those receiving more than $200,000, with 90 and 44, respectively. Labor organizations had the most executives making between $100,000 and $200,000 with 73, while social welfare organizations had the most executives making between $0 and $100,000 with 87.
Of the organizations we reviewed, The PGA Tour, Inc., a business league, paid the highest overall 1992 executive compensation ($4.1 million) to its Commissioner. /7/ The highest compensated executive of a social welfare organization was the Chairman, President, and Chief Executive Officer of the Mutual of America Life Insurance Company who received $1.2 million. The highest compensated officer of a labor or agricultural organization was the Executive Director of the Major League Baseball Players Association who received over $900,000.
RELATED ORGANIZATIONS
o Social welfare organizations could establish a tax-exempt
charitable organization.
o Charities could form a tax-exempt social welfare organization.
Related Organizations
A tax-exempt organization may be related to another organization that may be either a tax-exempt or taxable entity. For example, a social welfare organization might establish a tax-exempt charitable affiliate to receive tax deductible contributions, so long as their records show that their finances are kept separate. Conversely, a charitable organization could establish a social welfare organization to carry out lobbying and political activities, so long as the two organizations are separately incorporated, and they can document that contributions made to the charitable organization are not provided to the social welfare organization.
Executives, such as directors and officers, may serve and be compensated by related organizations. Each organization is required to describe its program and financial activities, including any transactions with related organizations, in its annual return filed with IRS. This includes any compensation paid to an executive by a related organization, provided the executive's total compensation is more than $100,000, of which more than $10,000 was provided by the related organization.
Of the 285 organizations we reviewed, 29 reported that their executives met these criteria. The amounts of total related compensation paid to these executives ranged from $12,320 to $711,807 (see app. II).
LOBBYING AND POLITICAL ACTIVITIES
Lobbying Political
Organizations Activities Activities
_____________ __________ __________
Social welfare, labor Unlimited Limited
and agricultural, and
business leagues
Charities Limited Prohibited
Lobbying and Political Activities
Lobbying activity involves an attempt to influence legislation through such means as contacting or urging the public to contact a member or employee of a legislative body, or a government official or employee of an executive agency who is in a position to propose, support, oppose, or reject legislation. "Grass-roots" lobbying is an attempt to influence the opinion of the general public concerning legislation.
Lobbying activity is permitted for social welfare organizations, labor and agricultural organizations, and business leagues and can be the primary activity of these types of organizations, providing it relates to their tax-exempt purposes. Certain charities may spend up to a maximum of $1 million annually on lobbying activities, provided that no more than 25 percent of the lobbying expenditures involves "grass-roots" lobbying. Charities that do not elect this lobbying limit may not engage in substantial lobbying activity.
Political activity involves participating or intervening in a political campaign on behalf of or in opposition to a candidate for public office. This type of activity includes the publication or distribution of printed statements and the making of oral statements favoring one candidate over another. /8/
Social welfare organizations, labor and agricultural organizations, and business leagues can engage in political activity, provided it is not the organizations' primary activity. For charities, political activity is generally prohibited. However, nonpartisan voter education, such as disseminating the overall voting record of Members of Congress pertaining to a variety of issues or conducting a "get-out-the-vote" drive, is a permissible activity.
TAX DEDUCTIBILITY OF CONTRIBUTIONS, DUES AND MEMBERSHIP FEES
Dues and
Membership
Organizations Contributions Fees
_____________ _____________ __________
Social welfare, labor Not Limited
and agricultural, and deductible
business leagues
Charities Limited Limited
Deductibility of Contributions, Dues, and Membership Fees Paid to
Tax-Exempt Organizations
One of the benefits of tax-exempt status is the deductibility of contributions, dues, and membership fees to taxpayers who provide such sources of revenue to tax-exempt organizations. This enables these organizations to raise some of the revenue needed to carry out their tax-exempt purpose.
Contributions to social welfare, labor and agricultural organizations, and business leagues are not tax deductible. Dues and membership fees paid to these organizations are deductible as a business expense, if they are ordinary and necessary for conducting the payor's business. However, the organizations must inform the contributors if any portion of such dues and membership fees is to be used for lobbying, because that portion is not tax deductible to the payors.
Contributions made to charities are tax deductible to the contributors, provided the contributions are not "earmarked" for either political activities or lobbying. Dues and membership fees paid to charities are tax deductible only to the extent that the amount paid is more than the value of any benefits received by the payor.
PROCESS FOR OBTAINING TAX-EXEMPT STATUS
[chart omitted]
An organization must apply for tax-exempt status to the IRS district office responsible for the geographic location in which the organization maintains its principal place of business. /9/ When applying, the organization must submit the following to IRS: (1) a signed application form; (2) an IRS Form 8718, "User Fee for Exempt Organization Determination Letter Request" with the appropriate user fee; (3) IRS Form SS-4, "Application for Employer Identification Number" (EIN) if the organization does not have an EIN; (4) various organizational documents, such as its Articles of Incorporation; (5) a narrative statement of past, present, and proposed activities; and (6) a proposed budget for 2 years for organizations with less than 1 year of operations, and (7) a statement of receipts and expenditures for the current and 3 preceding years, and a balance sheet for the most recent period for ongoing organizations.
IRS district office staff are to review the application package for completeness and determine whether the organization qualifies for tax exemption. If, during the initial screening IRS staff determine that the application package is incomplete, they are to contact the organization to obtain the missing information. Once the application is complete, IRS staff are to conduct a technical screening to determine if the application needs to be reviewed by an Exempt Organization specialist. In general, these specialists review applications that involve unusual circumstances, controversial issues, or contain voluminous attachments. If the specialist has concerns not specifically covered by statute, regulation, Treasury decision, or a ruling published in the Internal Revenue Bulletin, the application must be forwarded to IRS National Office staff for further review. Once the application review has been completed, IRS is to notify the organization with a determination letter.
IRS reviewed more than 57,000 applications for tax exemption in 1992. Of these, IRS approved nearly 44,000 (77 percent) and denied nearly 1,000 (2 percent). An additional 12,000 (21 percent) applications were neither approved nor denied because the organizations either withdrew their application or failed to provide the additional information requested by IRS.
IRS EXAMINATIONS OF TAX-EXEMPT ORGANIZATIONS
(FY90-FY94)
[chart omitted]
IRS Examinations of Selected Tax-Exempt Organizations (FY90-FY94)
Between fiscal years 1990 and 1994, the number of IRS' examinations decreased substantially for both social welfare organizations and business leagues, and increased slightly for labor and agricultural organizations. Specifically, examinations of social welfare organizations decreased from 816 in fiscal year 1990 to 397 in fiscal year 1994. During this same period the number of examinations of business leagues decreased from 1500 to 874. Meanwhile, the examinations of labor and agricultural organizations initially decreased from 764 in fiscal year 1990 to 560 in fiscal year 1992, but then subsequently increased to 828 in fiscal year 1994.
We did not attempt to determine the adequacy of IRS' efforts to monitor the activities of these organizations. However, in its May 1994 report, the Subcommittee on Oversight of the House Committee on Ways and Means recommended that IRS increase both the staffing and funding levels allocated for exempt organization examination and compliance activities, particularly related to charities.
TAXES AND PENALTIES ASSESSED AGAINST EXEMPT ORGS.
(FY90-94)
[chart omitted]
Taxes and Penalties Assessed Against Selected Tax-Exempt
Organizations (FY90-FY94)
While the combined number of examinations of social welfare organizations, labor and agricultural organizations, and business leagues has declined from fiscal year 1990 to fiscal year 1994, the taxes and penalties assessed against these organizations increased greatly during this period. For example, the taxes and penalties assessed against social welfare organizations increased from $484,554 in fiscal year 1990 to over $138 million in fiscal year 1994. During this period, taxes and penalties assessed against labor and agricultural organizations increased from about $2.4 million in fiscal year 1990 to nearly $20 million in fiscal year 1994, while taxes and penalties assessed against business leagues decreased from nearly $4.2 million to just over $1.1 million. A majority of these assessments resulted from examinations of IRS Form 990T, "Exempt Organization Business Income Tax Return. /10/
NUMBER OF REVOCATIONS OF TAX-EXEMPT STATUS
(FY92-94)
Fiscal years
_____________________
Organizations 1992 1993 1994
Social welfare 10 16 8
Labor and agricultural 1 0 1
Business leagues 6 11 14
Source: IRS Exempt Organizations Division.
Revocations of Tax-Exemption for Selected Organizations
(FY92-FY94)
Between fiscal year 1992 and fiscal year 1994, IRS revoked the tax-exemptions of a combined 67 social welfare organizations, labor and agricultural organizations, and business leagues. /11/ IRS revoked the tax exemption of 34 social welfare organizations, 31 business leagues, and 2 labor organizations during this 3-year period. IRS was unable to provide us with the specific reasons for these revocations.
In its May 1994 report, the Subcommittee on Oversight recommended that IRS be required to disclose the reasons for revoking an organization's tax-exempt status. At present, IRS is only required to disclose the name of charities that have had their tax-exemption revoked.
FOOTNOTES
/1/ This total does not include certain 501(c)(3) religious organizations that automatically qualify as tax-exempt and need not apply to IRS for tax-exemption as well as a small number of other organizations that qualify as tax-exempt under other IRC sections.
/2/ We selected examples of the largest IRC section 501(c)(4), (5) and (6) organizations on the basis of their assets.
/3/ This prohibition generally states that a person can only receive reasonable payment from an organization for goods and services provided.
/4/ We selected examples of charities on the basis of the largest amount of charitable donations received.
/5/ Specific data on the number of exempt organizations was not readily available prior to 1978.
/6/ Our compensation figures include all salary, benefits, including deferred compensation, and expense account items that an employee is required to claim on his or her individual income tax return, such as the value of housing, automobiles or other assets owned or leased by the organization. Although our compensation figures are for 1 year, compensation may vary from year to year.
/7/ The examples are presented to illustrate the range of salaries paid by these organizations to their executives. We did not attempt to determine whether or not the compensation was reasonable.
/8/ Tax-exempt organizations may establish separate segregated funds for conducting political activities. Such funds, established under IRC section 527, are tax-exempt as "political organizations provided contributions to the fund are used primarily for political purposes. Due to the strict limitations related to the political activity of charities imposed by IRC section 501(c)(3), a separate segregated fund established by a charity may not be used for political campaign involvement, such as influencing the election of a public official. Social welfare organizations, labor and agricultural organizations, and business leagues have no such limitation.
/9/ In the near future, IRS plans to consolidate its process for determining the tax-exempt status of organizations in one "key" district office.
/10/ Tax exempt organizations must file a separate return and pay income taxes on income over $1,000 that they receive as a result of activities that are not related to their exempt purpose.
/11/ IRS could not provide specific data concerning revocations prior to FY 92.
END OF FOOTNOTES
APPENDIX I
EXECUTIVES OF SELECTED TAX-EXEMPT
ORGANIZATIONS WHO WERE COMPENSATED
$200,000 OR MORE IN 1992
Organization Title Compensation
_____________________________________________________________________
SOCIAL WELFARE ORGANIZATIONS
American Association of Executive Director $323,537
Retired Persons
AVMED, Inc. President/Director 235,459
Senior Vice-President/
Director 205,390
Blue Cross Blue Shield President and Chief Executive 777,947
Association Officer
Executive Vice-President and 413,091
Chief Operating Officer (COO)
Senior Vice-President 221,929
Senior Vice-President 210,589
Senior Vice-President 200,960
Connecticare Executive Vice-President and 282,794
Chief Medical Officer
President and Chief Executive 216,845
Officer
Higher Education Assistance President 220,452
Foundation
Independent Health President 316,464
Association, Inc. Executive Vice-President 251,865
Marine Spill Response President 244,679
Corporation Vice-President-Operations/ 211,137
General Manager
Midwest Foundation Chief Executive Officer 380,718
Independent Physicians
Association Chief Medical Officer 241,995
Mutual of America Life Chairman, President and 1,209,573
Insurance Company Chief Executive Officer
Senior Executive Vice-President 328,173
and Chief Executive Officer
President and COO 322,338
Executive Vice-President/ 313,931
Chief Information Officer
Executive Vice-President- 287,455
External Affairs
Tufts Associated Health President 428,887
Maintenance Organization None Given 357,106
None Given 314,211
None Given 233,810
Washington Dental Service Executive Director 296,378
LABOR AND AGRICULTURAL ORGANIZATIONS
Air Line Pilots Association President 345,522
American Federation of President 260,004
State, County and Municipal
Employees (AFSCME) Secretary/Treasurer 222,965
American Federation of President 209,045
Teachers, AFL-CIO
Directors Guild of America Executive Director 420,627
International Longshoremens President 272,069
Secretary/Treasurer 245,494
Executive Vice-President 233,354
International Union of General President 223,897
Operating Engineers
Laborers International General President 318,827
Union of North America Second Vice-President 232,436
First Vice-President 225,928
General Secretary/Treasurer 218,149
Seventh Vice-President 214,264
Local 32B-32J Service President 267,119
Employees International Union
Major League Baseball Executive Director-Legal 931,578
Players Association Counsel
Michigan Education Executive Director 220,632
Association
National Education President 221,712
Association of US, Inc.
New York City District Executive Director 216,858
Council 37, AFSCME, AFL-CIO Treasurer 202,749
Screen Actors Guild, Inc. National Executive Director 318,007
Assistant National Executive 277,706
Director
Service Employees President 203,080
International Union
United Brotherhood of General President 219,136
Carpenters and Joiners of
America
United Food and Commercial President 293,992
Workers International Union Secretary/Treasurer 211,337
United Transportation Union Vice-President 285,903
Vice-President 277,105
President 214,927
BUSINESS LEAGUES
AIPSO President 275,713
Air Transport Association President 230,603
of America
American Bankers Association Executive Vice-President 489,951
American Bar Association Executive Director 230,525
American Board of Family Executive Director 381,305
Practice
American College of Executive Director 270,625
Emergency Physicians
American Dental Association Executive Director 215,850
American Gas Association President 343,780
Senior Vice-President 207,667
Senior Vice-President 203,125
American Hardware President, Chief Executive 373,588
Manufacturing Association Officer and Secretary
American Health Care Executive Vice-President 310,059
Association
American Hospital President 536,200
Association Senior Vice-President 258,766
Secretary/Treasurer 244,636
Executive Vice-President 238,540
Senior Vice President 213,859
American Institute of Executive Vice-President/Chief 303,787
Architects Executive Officer
American Institute of President 512,947
Certified Public
Accountants Counsel and Secretary 263,195
American Insurance President 616,176
Association Inc. Senior Vice-President 260,065
Senior Vice-President and 242,569
General Counsel
Senior Vice-President 230,782
American Medical Executive Vice-President 486,910
Association President-Elect 329,607
President 298,240
Immediate Past-President 220,070
American Petroleum Institute President 742,111
Senior Vice-President 282,393
Vice-President 215,108
Vice-President 213,440
Vice-President 205,387
American Pharmaceutical Executive Vice-President 336,849
Association
American Physical Therapy Executive Vice-President 259,614
Association
American Society of President 430,043
Association Executives
American Society of Executive Vice-President 458,773
Hospital Pharmacists
American Trucking President 295,750
Association, Inc.
AMT -- The Association For President 346,047
Manufacturing Technology
Association of American President and Chief Executive 488,188
Railroads Officer
Vice-President and General 288,065
Counsel
Executive Vice-President 274,393
ATP Tour, Inc. Chief Executive Officer 871,321
Audio Digest Foundation Vice-President 207,400
Bank Administration President/Chief Executive 245,000
Institute Officer
Breeders' Cup Limited Executive Director 209,053
President 203,077
Cable Television Labs, Inc. President/Chief Executive 394,038
Officer
Vice-President/COO 385,004
California Association of President 432,998
Hospitals and Health
Systems
California Association of Chief Executive 250,866
Realtors Vice-President 206,145
California Dental Executive Director 225,443
Association
Chamber of Commerce of the President 452,704
U.S.A. Senior Vice-President/Secretary 220,877
Senior Vice-President 220,877
Senior Vice-President 220,329
Chemical Industry Institute President 278,848
of Toxicology
Cosmetic Toiletry and President 542,137
Fragrance Association
Credit Union National President 304,728
Association, Inc.
Edison Electric Institute President 272,970
General Counsel and Executive 213,649
Vice-President
Electronic Industries President 475,063
Association Group Vice-President 201,096
Food Marketing Institute President 1,559,305
Senior Vice-President 254,429
Senior Vice-President 229,470
Greater Seattle Chamber of President 211,909
Commerce
Health Insurance Association President 422,307
of America Vice-President 261,542
Vice-President 211,379
Vice-President 208,553
Vice-President 201,846
Illinois Hospital President 283,858
Association Senior Vice-President 219,404
Independent Bankers Executive Vice-President 218,728
Association of America
Institute of Electrical and Executive Director 255,993
Electronics Engineers
International Council Of Executive Vice-President 539,681
Shopping Centers, Inc.
Investment Company Institute President 619,602
Executive Vice-President 353,698
Senior Vice-President -- 299,539
Legislative Affairs
Vice-President -- Tax and
Pension 230,361
Motion Picture Association President and Chief Executive 816,368
of America Officer
Executive Vice-President and 606,115
COO
NASDAQ, Inc. President 214,378
National Academy of President 612,386
Recording Arts and Sciences,
Inc.
National Association of President 634,426
Chain Drug Stores Vice-President -- Pharmacy 269,408
National Association of President 212,884
Convenience Stores
National Association of None Given 280,360
Professional Insurance
Agents
National Association of Executive Vice-President 438,340
Realtors
National Association of President and Chief Executive 431,178
Securities Dealers, Inc. Officer
Vice-President 202,072
National Council on President 445,580
Compensation Insurance COO 317,772
Senior Vice-President -- Rates 227,256
and External Affairs
Senior Vice-President -- 200,328
Information Resource
National Electrical President 214,143
Manufacturers Association
National Hot Rod President 335,000
Association
National Institute for President 227,925
Automotive Service
Excellence
National Rural Electric Executive Vice-President 233,777
Cooperative
National Soft Drink President 503,798
Association
National Solid Wastes Executive Director/Chief 321,090
Management Association Executive Officer
National Telephone Executive Director 232,300
Cooperative Association
National Wholesale Past Executive Director 589,149
Druggists' Association
New York Shipping President 230,550
Association, Inc.
Newspaper Association of President and Chief Executive 815,719
America Officer
Executive Vice-President and 309,361
COO
Open Software Foundation President 1,461,569
Treasurer 914,216
Secretary 267,299
PGA Tour, Inc. Commissioner 4,103,493
Deputy Commissioner/COO 693,335
Executive Vice-President- 528,580
Marketing
Executive Vice-President- 383,644
Counsel
Executive Vice-President 344,866
Portland Cement Association President 301,324
Public Securities President and Secretary 320,424
Association Executive Vice-President 266,613
Senior Vice-President and 208,607
General Counsel
Savings and Community Former President 310,508
Bankers of America
Savings Banks Life President (Retired) 213,463
Insurance Fund
Semiconductor Equipment and President 294,812
Materials International
Semiconductor Research President 272,981
Corporation
Sheet Metal and Air Executive Vice-President 232,310
Conditioning Contractors'
National Association
Society for Human Resource President/Chief Executive 334,080
Management Officer
Texas Medical Association Executive Vice-President 225,277
The Association of Trial Executive Director 243,408
Lawyers of America
The Council for Tobacco Chairman/President 340,634
Research -- USA, Inc.
The Hospital Association of President 239,241
Pennsylvania Senior Vice-President 207,759
The National Association of Executive Vice-President 586,026
Life Underwriters Senior Vice-President-General 208,145
Counsel
The Professional Golfers' Chief Executive Officer 386,788
Association of America
The Society of the Plastics President 290,637
Industry, Inc.
____________________________________________________________________
Source: GAO analysis of IRS data.
APPENDIX II
EXECUTIVES OF SELECTED TAX-EXEMPT
ORGANIZATIONS WHO RECEIVED COMPENSATION
FROM RELATED ORGANIZATIONS IN 1992
Organization (related
organization) Title Compensation
______________________________________________________________________
SOCIAL WELFARE ORGANIZATIONS
Higher Education Loan Chairman of the Board and
Program (HELP) of Kansas Director $49,700
HELP Management
Corporation 149,100
HELP America Inc. 12,400
HELP D.C. Inc. 24,800
HELP W.V. Inc. 12,400
TOTAL $248,400
_____________________________________________________________________
Higher Education Loan President/Secretary/
Program (HELP) of Kansas Treasurer 31,600
HELP Management
Corporation 52,800
HELP Management
Corporation 15,500
HELP W.V. Inc. 5,400
TOTAL $105,300
_____________________________________________________________________
AVMED, Inc. President/Director 235,459
Santafe
Management
Services, Inc. 16,011
Alachua General
Hospital, Inc. 35,676
TOTAL $287,146
_____________________________________________________________________
AVMED, Inc. Executive Vice
President/Director 147,812
Wellness, Inc. 3,650
Santafe Medical
Services, Inc. 3,650
Alachua General
Hospital, Inc. 12,744
Bradford Hospital,
Inc. 3,650
Suwannee Hospital,
Inc. 1,825
Lake Shore
Hospital, Inc. 5,475
North Central Florida
Rehabilitation, Inc. 3,650
Santafe
Management
Services, Inc. 1,113
TOTAL $183,599
_____________________________________________________________________
Henry Ford Health Care President
Corporation Self-Funded
Liability Plan $0
Henry Ford Health
System 700,900
TOTAL $700,900
_____________________________________________________________________
Henry Ford Health Care Trustee
Corporation
Self-Funded Liability Plan 0
Henry Ford Health
System 488,108
TOTAL $488,108
_____________________________________________________________________
Henry Ford Health Care Treasurer
Corporation Self-Funded
Liability Plan 0
Henry Ford Health
System 395,601
TOTAL $395,601
_____________________________________________________________________
Henry Ford Health Care Trustee
Corporation Self-Funded
Liability Plan 0
Henry Ford Health
System 263,210
TOTAL $263,210
_____________________________________________________________________
Henry Ford Health Care Trustee
Corporation Self-Funded
Liability Plan 0
Henry Ford Health
System 212,525
TOTAL $212,525
_____________________________________________________________________
LABOR AND AGRICULTURAL ORGANIZATIONS
International Brotherhood General Secretary-Treasurer
of Teamsters 187,617
Teamsters Local
Union No. 30 12,320
TOTAL $199,937
_____________________________________________________________________
International Brotherhood Vice President-International
of Teamsters Representative 166,564
Teamsters Local
Union No. 1999 57,684
Canadian
Conference of
Teamsters 78,289
TOTAL $302,537
_____________________________________________________________________
International Brotherhood Vice President-International
of Teamsters Representative 84,523
Teamsters Local
Union No. 938 85,566
Canadian
Conference of
Teamsters 19,100
TOTAL $189,189
_____________________________________________________________________
District 37 Benefits Fund Chairman of the Board
Trust $0
AFSCME District
Council 37 224,301
TOTAL $224,301
_____________________________________________________________________
District 37 Benefits Fund Trustee
Trust 0
AFSCME District
Council 37 210,016
TOTAL $210,016
_____________________________________________________________________
District 37 Benefits Fund Trustee
Trust 0
AFSCME District
Council 37 184,408
TOTAL $184,408
_____________________________________________________________________
Seafarers Harry Lundberg Trustee
School of Seamanship 0
Seafarers
International Union
of North America 68,977
United Industrial
Workers, Services,
Transportation,
Professional, and
Government of
North America 40,000
Seafarers Building 24,923
Corporation
TOTAL $133,900
_____________________________________________________________________
Joint Employment Administrator 5,323
Committee
MEBA Medical and
Benefits Plan 140,540
TOTAL $145,863
_____________________________________________________________________
BUSINESS LEAGUES
National Association of President and Chief
Securities Dealers, Inc. Executive Officer 431,178
NASD Market
Services, Inc. 214,378
NASDAQ, Inc. 214,378
TOTAL $859,934
_____________________________________________________________________
National Association of Executive Vice President
Securities Dealers, Inc. 181,133
NASD Market
Services, Inc. 90,566
NASDAQ, Inc. 90,566
TOTAL $362,265
_____________________________________________________________________
PGA Tour, Inc. Commissioner $4,103,493
PGA Tour Golf
Course Properties,
Inc. 711,807
TOTAL $4,815,300
_____________________________________________________________________
PGA Tour, Inc. Deputy Commissioner/COO 693,335
PGA Tour Golf
Course Properties,
Inc. 676,512
TOTAL $1,369,847
_____________________________________________________________________
PGA Tour, Inc. Executive Vice
President/Counsel 383,644
PGA Tour Golf
Course Properties,
Inc. 159,420
TOTAL $543,064
_____________________________________________________________________
The Hospital Association of President
Pennsylvania 239,241
PHICO Group, Inc. 83,750
TOTAL $322,991
_____________________________________________________________________
NASDAQ, Inc. President 214,378
NASD Market
Services, Inc. 214,378
National
Association of
Securities Dealers,
Inc. 428,760
TOTAL $857,516
_____________________________________________________________________
NASDAQ, Inc. Senior Vice President 92,367
NASD Market
Services, Inc. 75,401
National
Association of
Securities Dealers,
Inc. 20,734
TOTAL $188,502
_____________________________________________________________________
NASDAQ, Inc. Executive Vice President 90,566
NASD Market
Services, Inc. 90,566
National
Association of
Securities Dealers,
Inc. 181,133
TOTAL $362,265
_____________________________________________________________________
NASDAQ, Inc. Executive Vice President 84,710
NASD Market
Services, Inc. 84,710
National
Association of
Securities Dealers,
Inc. 169,422
TOTAL $388,842
_____________________________________________________________________
New Jersey Hospital President
Association 142,871
Center for Health
Affairs Inc. 214,089
TOTAL $356,960
_____________________________________________________________________
New Jersey Hospital Treasurer
Association 0
Center for Health
Affairs Inc. 180,457
TOTAL $180,457
New Jersey Hospital Secretary
Association 0
Center for Health
Affairs Inc. 169,309
TOTAL $169,309
_____________________________________________________________________
National Automobile Executive Vice President
Dealers Association 163,586
NADA Services
Corporation 104,264
TOTAL $267,850
_____________________________________________________________________
National Automobile Assistant Secretary
Dealers Association 72,011
NADA Services
Corporation 58,918
TOTAL $130,929
_____________________________________________________________________
American Trucking President
Association, Inc. 295,750
ATA Litigation Center 45,500
ATA Foundation 45,500
Deliver USA 22,750
ATA Services, Inc. 22,750
Trucking
Information Services 22,750
TOTAL $455,000
_____________________________________________________________________
California League of President
Savings Institutions 79,823
California League
Financial Services,
Inc. 25,207
TOTAL $105,030
_____________________________________________________________________
National Wholesale President
Druggists' Association 157,611
NWDA Service
Corp. 22,370
TOTAL $179,981
American Insurance President
Association, Inc. 616,176
American Insurance
Services Group, Inc. 331,788
TOTAL $947,964
_____________________________________________________________________
American Insurance Senior Vice-President and
Association, Inc. COO $186,154
American Insurance
Services Group, Inc. 124,104
TOTAL $310,258
_____________________________________________________________________
Note: This table includes only the top five executives of these
organizations who received compensation from related organizations.
Source: GAO analysis of IRS data.
APPENDIX III
ASSETS, REVENUES AND EXPENSES OF THE
TAX-EXEMPT ORGANIZATIONS INCLUDED IN THIS STUDY
Dollars in thousands
Name of organization Assets Revenues Expenses
______________________________________________________________________
SOCIAL WELFARE ORGANIZATIONS
American Association of Retired Persons $330,638 $292,264 $310,763
AVMED, Inc. 98,346 310,256 288,561
Bank of Sweden Tercentenary Foundation 284,429 20,988 14,371
Blue Care Network of Southeast Michigan 132,446 173,845 158,686
Blue Care Network-Great Lakes 54,598 172,034 169,729
Blue Cross Blue Shield Association 134,320 133,381 131,159
California Vision Service 143,754 304,224 299,865
Capital District Physicians' Health Plan, 69,372 164,166 151,289
Inc.
City of Mesa-Municipal Development 50,152 3,101 2,339
Corporation
City of Scottsdale Municipal Property 203,588 41,913 15,178
Corporation
Columbus Multi-School Building 57,291 1,653 3,316
Corporation
Connecticare 60,906 190,645 187,197
County of Riverside Asset Leasing 580,280 34,651 29,879
Corporation
CSDA Finance Corporation 274,390 19,787 19,730
Delta Dental Plan of Michigan, Inc. 148,660 401,729 399,206
Delta Dental Plan of New Jersey, Inc. 67,113 130,564 122,605
Disabled American Veterans 144,832 70,995 68,854
Firemen's Association of the State of New 66,710 9,549 5,610
York
Firemens Relief Associations of Minnesota 52,968 3,403 1,419
Group Health Association 82,704 251,817 248,624
Henry Ford Health Care Corporation 55,565 23,345 21,712
Liability Fund
Higher Education Assistance Foundation 216,210 172,588 62,703
Higher Education Loan Program of 235,523 14,972 10,969
Kansas, Inc.
Independent Health Association, Inc. 83,935 252,288 244,398
International Olympic Committee 127,121 18,122 22,696
JADER Trust 101,133 6,194 4,060
Luso-American Development Foundation 130,327 24,890 15,188
Marine Spill Response Corporation 264,818 84,610 72,888
Medcenters Health Care, Inc. 102,899 352,189 349,834
Merrillville Multi-School Building 117,269 3,304 5,773
Corporation
Midwest Foundation Independent 110,063 225,844 213,056
Physicians Association
Minneapolis Fire Department Relief 165,395 15,777 11,714
Association
Minneapolis Police Relief Association 264,282 41,230 967
Minnesota School Boards Association 67,554 42,090 42,056
Insurance Trust
Mohawk Valley Physician's Health Plan 66,183 178,909 175,637
Municipal Improvement Corporation/Los 69,061 151,037 158,579
Angeles
Mutual of America Life Insurance Company 5,521,940 746,637 718,746
National Rifle Association of America 111,019 101,781 139,022
New Albany-Floyd County School Building 57,932 1,242 51
Corporation
Physicians Health Plan, Inc. 56,639 178,754 178,352
Regional Airports Improvement 489,656 38,936 38,936
Corporation
Sisters of Providence Good Health Plan of 58,863 117,663 111,068
Oregon
The Buffalo Enterprise Development 78,897 2,192 2,926
Corporation
Trans-Alaska Pipeline Liability Fund 327,579 37,746 57,633
Tufts Associated Health Maintenance 88,902 311,821 300,897
Organization
Washington Dental Service 73,670 191,874 188,824
LABOR AND AGRICULTURAL ORGANIZATIONS
AFL-CIO 77,991 69,037 61,736
Air Line Pilots Association 97,057 82,143 69,723
Amalgamated Clothing and Textile 25,273 3,589 2,053
Workers Union-Rochester Joint Board
American Federation of State, County and 26,862 77,326 74,497
Municipal Employees
American Federation of Teachers, AFL-CIO 51,073 69,280 63,279
Atlantic Coast District ILA 26,130 3,275 2,726
Bakery Confectionery and Tobacco 24,178 11,875 12,056
Workers International
Carrier-ILA Container Freight Station 33,375 14,544 2,330
Trust Fund
Dakota's Areawide IBEW-NECA Pension 35,770 3,447 1,295
Fund
Directors Guild of America 45,632 10,553 7,029
District Council 37 Benefits Fund Trust 147,285 155,707 138,853
Educational and Cultural Trust Fund of 30,534 1,766 6,926
the Electrical Industry
Holstein-Friesian Association of America 27,845 16,166 16,866
International Brotherhood of Electrical 23,421 5,612 4,342
Workers #5
International Brotherhood of Painters and 36,924 24,445 23,483
Allied Trades
International Brotherhood of Teamsters 138,104 98,321 129,850
International Ladies Garment Workers 61,032 43,539 45,896
International Ladies Garment Workers 383,316 83,969 66,865
Union
International Longshoremens 39,479 10,635 10,684
International Union of Electronic 51,441 21,792 19,982
Workers, AFL-CIO
International Union of Operating
Engineers 85,802 36,854 23,522
International Union, UAW 1,052,775 386,988 365,476
Joint Employment Committee 23,606 1,923 1,009
Laborers International Union of North 151,957 52,223 82,546
America
Local 32B-32J Service Employees 64,207 24,406 17,201
International Union
Local One, Amalgamated Lithographers of 30,112 3,806 17,748
America
Los Angeles County Fair Association 88,041 30,297 29,446
Major League Baseball Players
Association 128,461 38,974 5,927
Michigan Education Association 23,529 41,881 43,198
National Education Association of
US, Inc. 127,661 186,472 186,754
National League of Postmasters 26,533 33,892 91,700
New York City District Council 37, 31,216 26,166 24,654
AFSCME, AFL-CIO
North Carolina Farm Bureau Federation, 22,491 6,425 4,321
Inc.
Retail Wholesale and Department Store 40,690 6,779 2,380
Union, Local 338
Retail Wholesale And Department Store 24,108 8,165 9,497
Union
Screen Actors Guild, Inc. 40,832 25,747 28,798
Seafarers Harry Lundeberg School of 40,183 9,371 15,426
Seamanship
Service Employees International Union 45,325 57,935 55,026
UAW-Chrysler Skill Development And 55,368 50,248 28,835
Training Program
United Brotherhood of Carpenters and 154,532 58,204 56,542
Joiners of America
United Food And Commercial Workers 127,861 117,159 108,752
International Union
United Mine Workers of America 127,765 37,887 26,077
United Paperworkers International Union 33,025 28,114 26,415
United States Letter Carriers Mutual 67,931 20,145 17,557
Benefit Association
United Steelworkers of America 194,904 232,187 237,493
International Union
United Transportation Union 48,407 40,937 37,326
BUSINESS LEAGUES
Academy of Motion Picture Arts and 38,730 17,431 11,909
Sciences
AIPSO 19,552 11,339 34,291
Air Transport Association of America 13,234 35,871 35,871
Alabama Insurance Guaranty Association 23,383 11,357 11,164
American Association of Nurse 10,786 8,906 7,496
Anesthetists
American Association of Oral And 12,979 7,373 6,881
Maxillofacial Surgeons
American Bankers Association 82,702 53,318 50,732
American Bar Association 117,925 95,142 88,439
American Board of Family Practice 11,713 5,993 5,334
American Board of Obstetrics and 9,600 3,508 3,046
Gynecology, Inc.
American Board of Psychiatry and 10,187 5,708 4,055
Neurology
American College of Emergency 10,135 13,580 13,506
Physicians
American Dental Association 52,635 43,240 46,023
American Gas Association 24,817 59,383 59,148
American Hardware Manufacturing 17,846 7,771 6,451
Association
American Health Care Association 10,707 10,709 10,373
American Health Information Management 17,447 8,243 9,304
Association
American Hospital Association 83,379 85,474 85,088
American Institute of Architects 44,446 31,396 34,988
American Institute of Certified Public 71,502 120,200 117,745
Accountants
American Insurance Association Inc. 10,785 22,607 23,595
American Medical Association 215,144 170,186 174,571
American Nurses Association 11,798 21,375 19,132
American Petroleum Institute 40,790 69,510 70,728
American Pharmaceutical Association 9,291 9,956 9,954
American Physical Therapy Association 16,447 17,017 16,484
American Plywood Association 9,315 13,757 13,464
American Public Transit Association 14,225 9,325 9,142
American Society of Association 12,013 15,752 15,595
Executives
American Society of Hospital Pharmacists 29,375 24,837 23,021
American Speech-Language-Hearing 26,872 16,330 16,088
Association
American Trucking Association, Inc. 21,192 27,482 27,018
American Veterinary Medical Association 15,263 13,122 12,885
Americus-Sumpter Payroll Development 9,644 1,993 771
Authority
AMT -- The Association for Manufacturing 19,372 17,879 17,065
Technology
Arkansas Capital Corporation 16,976 1,303 1,079
Association for Information And Image 14,571 9,992 7,873
Management
Association of American Railroads 41,007 93,240 83,106
ATP Tour, Inc. 24,922 42,759 42,350
Attorney Registration and Disciplinary 13,495 7,216 5,842
Commission of the Supreme Court of
Illinois
Audio Digest Foundation 17,997 8,201 7,753
Bank Administration Institute 14,620 4,358 4,385
Baseball Office of the Commissioner 18,651 15,636 14,636
Breeders' Cup Limited 31,510 30,041 24,973
Cable Television Labs, Inc. 19,305 11,176 10,046
California Association of Hospitals and 16,939 12,353 12,572
Health Systems
California Association of Realtors 12,541 15,961 15,808
California Dental Association 70,445 16,881 10,617
California League of Savings Institutions 12,974 2,650 2,776
California Medical Association, Inc. 10,319 16,154 16,891
Career College Association 6,812 10,337 10,792
Central Minnesota Development Company 13,290 1,110 1,087
Chamber of Commerce of the USA 40,916 67,474 80,186
Chemical Industry Institute of Toxicology 20,924 15,454 15,489
Chemical Specialties Manufacturers 9,383 3,811 3,519
Association
Chicago Bar Association 16,590 7,526 7,246
Connecticut Insurance Guaranty 55,187 10,636 23,394
Association
Construction Industry Manufacturing 15,519 8,513 3,425
Association
Cosmetic Toiletry And Fragrance 12,611 8,498 8,396
Association
Credit Union National Association, Inc. 12,837 24,028 22,875
Delaware Insurance Guaranty Association 13,921 8,348 3,063
Edison Electric Institute 46,546 61,299 59,154
Electronic Industries Association 47,914 41,440 34,668
Empire State Electric Energy 32,443 2,500 2,625
Florida Insurance Guaranty Association, 45,203 147,783 221,720
Inc.
Florida Self Insurers Guaranty
Association, Inc. Unknown 6,552 7,397
Food Marketing Institute 34,241 34,347 33,354
Georgia Insurers Insolvency Pool 18,308 1,511 5,743
Greater Erie Industrial Development 14,271 1,079 365
Corporation
Greater Seattle Chamber of Commerce 10,117 7,746 7,764
Health Insurance Association of America 17,963 27,355 32,675
Illinois Hospital Association 16,859 10,769 10,077
Illinois Insurance Exchange Guaranty 18,459 1,686 2
Fund, Inc.
Illinois Insurance Guaranty Fund 47,792 23,896 18,887
Independent Bankers Association of 11,376 8,652 8,024
America
Independent Insurance Agents of America 14,324 11,105 9,289
Indiana Life and Health Insurance 43,640 33,291 36,670
Guaranty Association
Institute of Electrical And Electronics 109,639 110,474 107,237
Engineers
International Council of Shopping 17,639 18,789 17,285
Centers, Inc.
Investment Company Institute 14,518 23,255 22,372
Louisiana Insurance Guaranty Association 28,805 70,760 75,814
Maine Insurance Guaranty Association 15,126 14,039 14,650
Marine Preservation Association 25,660 104,117 85,902
Massachusetts Insurers Insolvency Fund 56,289 33,155 23,782
Massachusetts Medical Society 60,218 55,584 53,005
Medical and Chirurgical Faculty of 15,198 4,387 3,791
Maryland
Medical Society of the State of New York 11,369 8,102 8,533
Michigan Automobile Insurance 312,544 242,643 239,053
Placement Facility
Michigan Basic Property Insurance 52,602 94,813 76,990
Association
Michigan Credit Union League 17,564 5,557 5,180
Michigan Life And Health Insurance 9,289 9,474 7,728
Guaranty Association
Michigan Property And Casualty Guaranty 30,056 9,560 15,067
Association
Million Dollar Round Table of the National 13,528 8,473 7,755
Association of Life Underwriters
Minnesota Insurance Guaranty Association 40,073 24,099 25,490
Minnesota Life and Health Insurance 25,524 5,053 14,094
Guaranty Association
Minnesota Workers Compensation 46,595 7,138 3,337
Insurers Association, Inc.
Mississippi Insurance Guaranty 15,020 5,172 3,945
Association
Mississippi Life And Health Insurance 13,736 3,349 3,341
Guaranty Association
Missouri Joint Underwriting Association 11,197 7,779 8,808
Motion Picture Association of America 20,393 29,322 27,860
Motor Vehicle Accident Indemnification 54,770 34,706 33,023
Corporation
NASDAQ, Inc. 79,045 62,313 46,554
National Academy of Recording Arts and 19,745 15,769 11,734
Sciences, Inc.
National Association of Chain Drug Stores 12,636 14,460 13,549
National Association of Convenience 9,596 7,818 6,961
Stores
National Association of Music Merchants, 15,057 5,889 4,733
Inc.
National Association of Printers And 17,254 3,305 3,253
Lithographers
National Association of Professional 24,617 5,512 5,397
Insurance Agents
National Association of Realtors 51,529 48,611 57,469
National Association of Securities 286,251 161,972 144,034
Dealers, Inc.
National Automobile Dealers Association 42,173 23,468 18,774
National Cargo Bureau 9,874 8,971 7,989
National Council on Compensation 48,693 100,215 98,890
Insurance
National Electrical Manufacturers 9,282 11,760 11,495
Association
National Federation of Independent 30,553 63,160 61,917
Business, Inc.
National Food Processors Association 29,228 17,481 16,557
National Hot Rod Association 23,375 44,120 41,377
National Institute for Automotive Service 11,500 10,933 8,300
Excellence
National Live Stock and Meat Board 13,623 53,977 52,773
National Rural Electric Cooperative 39,192 54,625 53,857
National Soft Drink Association 12,230 10,298 7,033
National Solid Wastes Management 11,110 14,938 14,001
Association
National Telephone Cooperative 14,940 7,600 7,075
Association
National Wholesale Druggists' Association 11,212 7,372 6,870
New Hampshire Automobile Reinsurance 79,042 32,113 1,924
Facility
New Hampshire Insurance Guaranty 14,087 8,292 4,796
Association
New Jersey Hospital Association 43,160 7,329 6,889
New Jersey Property Liability Insurance 34,462 174,652 8,618
Guaranty Association
New Jersey Surplus Lines Insurance 34,816 26,043 1,579
Guaranty Fund
New Mexico Property and Casualty 9,548 10,343 6,902
Insurance Guaranty Association
New York Shipping Association, Inc. 51,823 181,265 83,085
New York State Bar Association 11,784 13,167 12,287
Newspaper Association of America 26,263 32,225 32,786
North Carolina Insurance Guaranty 17,056 9,042 10,145
Association
North Carolina Life and Health Guaranty 33,999 48,129 23,419
Association
North Dakota Insurance Guaranty 1,724 137 212
Association
Northern California Golf Association 11,087 3,478 2,992
Ohio Education Association 11,429 28,297 28,291
Ohio Insurance Guarantee Association 57,319 13,211 10,398
Ohio Life And Health Insurance Guaranty 92,509 43,250 8,993
Association
Ohio State Bar Association 11,762 5,734 5,065
Oklahoma Property and Casualty 20,665 10,627 5,615
Insurance Guaranty Association
Open Software Foundation 27,876 61,860 61,860
Packaging Machinery Manufacturers 11,710 9,051 8,100
Institute
Pennsylvania Chamber of Business and 9,639 3,508 3,087
Industry
Pennsylvania Insurance Guaranty 128,763 11,282 14,103
Association
Pennsylvania Life and Health Insurance 45,503 69,883 71,326
Guaranty Association
Pennsylvania Medical Society 23,816 8,634 8,453
Pennsylvania Professional Liability Joint 58,275 8,852 3,727
Underwriters
Pennsylvania State Education Association 22,988 30,829 31,033
PGA Tour, Inc. 199,157 174,111 171,341
Portland Cement Association 13,745 10,486 13,439
Printing Industries of America, Inc. 9,711 8,954 9,576
Public Securities Association 11,124 13,310 12,297
Realtors National Marketing Institute 9,958 7,043 7,546
of the National Association of Realtors
Regional IDC of Southwestern 111,673 18,241 19,231
Pennsylvania
Retail Merchants Association of Greater 26,024 2,233 2,287
Richmond
Rhode Island Automobile Insurance Plan 15,638 3,768 3,372
Rhode Island Insurers Insolvency Fund 14,785 19,882 14,680
Savings And Community Bankers of 28,290 22,394 24,377
America
Savings Banks Life Insurance Fund 17,592 10,858 10,367
Securities Investor Protection
Corporation 734,867 73,450 16,850
Self Insurers Security Fund 21,465 6,589 5,078
Semiconductor Equipment and Materials 15,222 17,349 16,457
International
Semiconductor Research Corporation 10,491 35,028 35,620
Sheet Metal and Air Conditioning 9,492 5,437 6,048
Contractors' National Association
Snake River Power, Inc. 14,485 1,333 1,330
Society for Human Resource Management 14,404 15,433 14,848
South Carolina Property and Casualty 9,705 4,001 3,264
Insurance Guaranty Association
State Medical Society of Wisconsin 10,288 4,633 4,542
Tennessee Insurance Guaranty 13,354 1,845 1,620
Association
Texas Life Accident Health and Hospital 63,062 75,747 27,989
Service Insurance Guaranty Association
Texas Medical Association 28,721 12,601 12,286
Texas Property And Casualty Insurance 91,068 120,515 97,641
Guaranty Association
Textile Hall Corporation 21,350 4,539 2,042
The American Society of Anesthesiologists 21,889 13,922 11,318
The Association of Trial Lawyers of 13,235 15,144 16,531
America
The Council for Tobacco Research-USA, 15,111 25,666 25,491
Inc.
The Economic Development Partnership 28,497 14,829 3,599
of Alabama
The Hospital Association of Pennsylvania 194,846 7,200 7,695
The Medical Society of the District of 9,990 2,153 2,033
Columbia
The National Association of Life 13,135 18,466 22,341
Underwriters
The Professional Golfers' Association of 44,090 32,647 29,902
America
The Society of the Plastics Industry, Inc. 28,419 77,212 76,310
Uniform Code Council, Inc. 49,007 10,372 4,636
United States Tennis Association, Inc. 74,862 82,235 90,747
University Research Park, Inc. 14,953 1,815 1,281
Virginia Property And Casualty Insurance 13,579 2,109 6,997
Guaranty Association
APPENDIX III
ASSETS, REVENUES AND EXPENSES OF THE
TAX-EXEMPT ORGANIZATIONS INCLUDED IN THIS STUDY
Dollars in thousands
Name of Organization Assets Revenues Expenses
____________________ ______ ________ ________
WACO Industrial Foundation 12,149 209 275
Wisconsin Insurance Security Fund 13,870 14,602 11,062
Wisconsin Workers Compensation 224,116 125,086 103,487
Insurance Pool
York County Industrial Development 226,400 483 446
Authority
York County Industrial Development 15,728 1,045 996
Corporation
Source: GAO analysis of IRS data.
APPENDIX IV
CATEGORY AND TYPE OF TAX-EXEMPT
ORGANIZATIONS UNDER IRC SECTION 501(c)
SECTION 501(c) TYPES OF TAX-EXEMPT ORGANIZATIONS
CATEGORY
(1) Corporations organized under an act of Congress and
operated as an instrumentality of the United
States, for example, Federal Deposit Insurance
Corporation.
(2) Title holding corporations organized to hold
title to property of a tax-exempt organization,
collect the income, and deliver the net proceeds to
the exempt organization.
(3) Entities organized and operated exclusively for
religious and charitable, scientific, testing for
public safety, literacy, or educational purposes,
or for the prevention of cruelty to children or
animals, or to foster amateur sports.
(4) Civic leagues or organizations operated exclusively
for the promotion of social welfare or local
associations of employees (earnings devoted to
charitable, educational, or recreational purposes).
(5) Labor, agricultural, and horticultural
organizations organized to provide education and
instruction on improving working conditions and
products.
(6) Business leagues, chambers of commerce, real estate
boards, and professional football leagues organized
to improve business conditions.
(7) Clubs organized for pleasure and recreational
purposes.
(8) Fraternal beneficiary societies and associations
organized to provide for the payment of life,
sickness, accident or other benefits to members and
operated under a framework of self-governing
branches chartered by a parent organization.
(9) Voluntary employee beneficiary association
providing for payment of life, sickness, accident
or other benefits to members of the association.
(10) Domestic fraternal societies and associations
operated exclusively for social, educational,
religious, scientific, charitable, and fraternal
purposes under a framework of self-governing
branches chartered by a parent organization.
(11) Teachers' retirement fund associations organized on
a local basis.
(12) Benevolent life insurance associations; mutual
companies, such as electric, irrigation, and
cooperative companies organized on a local basis.
(13) Cemetery companies owned and operated for the
benefit of their members and not operated for
profit.
(14) Nonprofit credit unions and mutual reserve funds
providing loans to members and reserve funds
for domestic building and loan associations,
cooperative banks and mutual savings banks,
(mutuals must have been organized before 9/1/57).
(15) Mutual insurance companies or associations, with
net premiums not more than $350,000 providing
insurance to members (other than life companies).
(16) Cooperative organizations established to finance
crop operations.
(17) A trust or trusts providing for the payment of
supplemental unemployment benefits.
(18) A trust providing for the payment of benefits under
a pension plan funded by employees, created prior
to 6/25/59.
(19) A post or organization promoting the welfare of
past or present members of the Armed Forces.
(20) An organization or trust providing legal services
as part of a qualified group legal services plan.
(21) A trust or trusts organized to meet black lung
disability and liability claims.
(22) Pension plan withdrawal liability trust created to
provide funds to meet payments under section
4223(c) or (h) of the Employee Retirement Income
Security Act of 1974.
(23) Veterans' insurance associations created to provide
insurance and other benefits to member veterans.
(24) Trusts described in section 4049 of the Employee
Retirement Income Security Act of 1974.
(25) Title-holding companies with 35 or fewer entities
exempt under IRC section 401 and 501(c)(3) and
governmental units.
Source: IRC.
APPENDIX V
MAJOR CONTRIBUTORS TO THIS BRIEFING REPORT
GENERAL GOVERNMENT DIVISION, WASHINGTON, D.C.
Michael Brostek, Assistant Director
Mary Phillips, Assignment Manager
Robert McKay, Evaluator-in-Charge
Bryon Gordon, Evaluator
Pat McGuire, Senior Computer Specialist
Susan Baker, Computer Specialist
Katherine M. Wheeler, Publishing Advisor
Hazel Bailey, Writer-Editor
Rosa Hayes, Secretary
- Institutional AuthorsGeneral Accounting Office
- Code Sections
- Subject Area/Tax Topics
- Index Termsexempt organizations, compensation, officers and directorsexempt organizations, social welfare
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 95-2992 (72 pages)
- Tax Analysts Electronic Citation95 TNT 53-8