Tax-Exempt Organizations Engaged in an Unrelated Trade or Business Not Reporting to the IRS

Representative J.J. Pickle (Democrat, Texas), chairman of the House Ways and Means Subcommittee on Oversight,

Representative J.J. Pickle (Democrat, Texas), chairman of the House Ways and Means Subcommittee on Oversight, has announced plans to conduct hearings later this year on the subject of television evangelists.

Representative Pickle's subcommittee recently concluded hearings on the unrelated business activities of tax-exempt organizations. Concern was expressed over the unfair competition that universities and certain health facilities allegedly pose to taxable entities. IRS records reveal that fewer than 3% of all tax-exempt organizations report unrelated business income to the IRS (on Form 990-T).

Many believe that there are several tax-exempt organizations engaged in an unrelated trade or business that are not reporting their activities to the IRS as required by law. Any legislative change in this area will probably await the results of an IRS technical compliance audit of 3,000 tax-exempt organizations.

Source: Church Law & Tax Report 1987

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