Looking at How the IRS Looks at Non-Profits

The House Ways and Means Committee has expressed plans to closely review the IRS process for monitoring tax-exempt organizations. This intent was expressed during hearings regarding the AARP, which is facing allegations that the organization’s financial structure should merit a revocation of their exemption status.

Rep. Wally Herger (R-Calif.) asserted that the AARP “no longer operates like a seniors’ advocacy organization” due to its dependency on the funding it receives from insurance companies. The concern is that the AARP board members oversee both the unit that runs the insurance plan as well as the unit that oversees advocacy causing questions about the independence between the two and suggesting that the organization functions more akin to an insurance company itself.

AARP CEO A. Barry Rand staunchly defends the structure and has issued a recorded statement with all hearing related supporting documents available in one place on the organization’s website to promote transparency.

Tax experts were called to testify in the hearing, arguing that the organization’s structure falls within tax guidelines.

Read more about the hearing at the Chronicles of Philanthropy.