Tax Exempt Status

U.S. Rep. Bill Thomas (R-Bakersfield) is questioning whether the NCAA, with its $521.1-million annual budget and lucrative television rights package, deserves its tax-exempt status. In a pointed, eight-page letter sent Monday to NCAA President Myles Brand, Thomas suggested that big-time athletic programs might be at odds with the purpose of higher education and might not qualify for tax-exempt status.

Several well-known conservative organizations may have put their tax-exempt status at risk as a result of helping disgraced lobbyist Jack Abramoff and his clients, according to a new report from congressional Democrats. The report by the minority staff of the Senate Finance Committee concludes that the organizations "appear to have perpetrated a fraud on other taxpayers" by engaging in "what amounted to profit seeking and private benefit behavior inconsistent with their tax-exempt status."

The Internal Revenue Service has approved tax-exempt status for the proposed California Earthquake Authority, a vital step toward a plan to provide homeowners with at least limited quake insurance. Insurance Commissioner Chuck Quackenbush, who has assembled commitments from many insurance companies to participate in the state-run agency, and $1.7 billion to support it, will formally announce the IRS approval today, sources said.

A Republican-appointed tax group--the one pushing a single-rate system with few deductions--wants the IRS to give it tax-exempt status so its contributors can write off their donations. The foundation set up to finance the National Commission on Economic Growth and Tax Reform has asked the Internal Revenue Service to classify it as a Section 501(c)(3) organization. That would allow contributors to deduct donations to it from their income the same way people who who donate to charities can.

Anyone trying to find high-ranking state officials this week might check posh overseas tourist spots -- where many are traveling for free. About 16 Schwarzenegger administration officials, regulators and state lawmakers are spending spring break on fact-finding missions and conferences in Europe and Japan. The excursions were paid for by tax-exempt groups whose donors include corporations with business before the state, according to itineraries and guest rosters compiled by trip sponsors.

Wiley S. Drake, a Buena Park pastor and a former national leader of the Southern Baptist Convention, called on his followers to pray for the deaths of two leaders of Americans United for Separation of Church and State. The request was in response to the liberal group's urging the IRS on Tuesday to investigate Drake's church's nonprofit status because Drake endorsed former Arkansas Gov. Mike Huckabee for president on church letterhead and during a church-affiliated Internet radio show.

Focus on the Family Chairman James Dobson has been cleared of accusations that he endangered his organization's nonprofit status by endorsing Republican candidates in 2004, an Internal Revenue Service audit found. The IRS said Dobson, an influential child psychologist who backed President Bush's reelection bid, was acting as an individual and not on behalf of the conservative Christian ministry when endorsing politicians.

The Internal Revenue Service has canceled the tax-exempt status of some of the nation's largest educational credit counseling services after audits revealed they existed mainly to prey on debt-ridden customers, Commissioner Mark Everson said Monday. "These organizations have not been operating for the public good and don't deserve tax-exempt status," Everson said. "They have poisoned an entire sector of the charitable community."

The Internal Revenue Service is warning churches and nonprofits that improper campaigning in the upcoming political season could endanger their tax-exempt status. The agency also launched a program to expedite investigations into claims of improper campaigning, prompting an advocacy group to charge this month that the program could restrict the free speech of nonprofit groups and churches.

Stepping up its probe of allegedly improper campaigning by churches, the Internal Revenue Service on Friday ordered a liberal Pasadena parish to turn over all the documents and e-mails it produced during the 2004 election year with references to political candidates. All Saints Episcopal Church and its rector, the Rev. Ed Bacon, have until Sept. 29 to present the sermons, newsletters and electronic communications.