Post by Gene on Aug 23, 2008 13:20:29 GMT -5
readingeagle.com/blog.aspx?bid=4
NFL must comply with IRS regulation
Saturday, August 23, 2008
The Issue: The NFL, listed as a nonprofit organization, objects to a new rule requiring it to list the salaries of key personnel.
Our Opinion: If the league doesn’t want to comply with the regulations for nonprofit organizations, it should give up its not-for-profit designation.
You might be surprised to learn — we certainly were — that the NFL is a not-for-profit organization, much like any charity or trade organization that operates in the Untied States.
As part of that nonprofit designation, the NFL is required to complete Internal Revenue Service Form 990, which requires not-for-profit organizations to name their key employees and the salaries they receive.
Up until this year, the NFL considered its commissioner, whose salary is close to $10 million, as its only key employee, and it is fighting a new IRS rule that would require the league — and all other nonprofit agencies, for that matter — to disclose any employee receiving more than $150,000 annually.
The league’s argument, according to a story in The New York Times, is that the NFL is not a charity that receives public donations, but rather a trade association financed by the 32 member teams, which can request and receive the salary information any time they want.
As a result, the league is asking to be exempt from the new reporting rule.
Joe Browne, the NFL’s executive vice president for communications and public affairs, told the Times there is no public purpose in disclosing more trade-group salaries.
But Sen. Chuck Grassley, an Iowa Republican, said: "Disclosure helps keep everyone honest. If, as requested, professional associations such as the NFL are allowed to keep salary information from the public, other tax-exempt groups would ask for the same treatment. This would be contrary to the goal of increasing transparency and accountability from tax-exempt organizations to the public."
First, the idea that the NFL is a nonprofit organization seems to be ridiculous on its face. The league has so many for-profit subsidiaries that generate hundreds of millions of dollars in income every year that the nonprofit status for the umbrella organization is a farce.
But who are we to question IRS regulations? If the NFL can qualify as a nonprofit agency, so be it. But then it shouldn’t squawk about the rules it is required to follow.
But chances are the NFL is more concerned about one of two things:
Its employees could learn what their co-workers earn and perhaps demand equity.
The public could learn the salaries, which could reflect poorly on the league.
Remember, we’re not talking about the NFL players here, but the people in the league office.
Marcus S. Owens, a lawyer who led the IRS Exempt Organizations Division from 1990 to 2000, told the Times that salary disclosure always had been one of the most politically sensitive parts of Form 990.
If that is the case and the NFL feels the reporting requirement is too great a burden for the league, it can follow in the footsteps of Major League Baseball, which gave up its not-for-profit status last year in favor of forming a for-profit corporation.
As a result, baseball is not required to disclose the salaries of its key employees on a form that the IRS makes available to the public. Problem solved.
Of course, that could mean a few other problems for the NFL, such as having to pay sales tax on its purchases and perhaps income tax on league revenues that exceed expenses — you know, profit.
But the league can’t have it both ways.
NFL must comply with IRS regulation
Saturday, August 23, 2008
The Issue: The NFL, listed as a nonprofit organization, objects to a new rule requiring it to list the salaries of key personnel.
Our Opinion: If the league doesn’t want to comply with the regulations for nonprofit organizations, it should give up its not-for-profit designation.
You might be surprised to learn — we certainly were — that the NFL is a not-for-profit organization, much like any charity or trade organization that operates in the Untied States.
As part of that nonprofit designation, the NFL is required to complete Internal Revenue Service Form 990, which requires not-for-profit organizations to name their key employees and the salaries they receive.
Up until this year, the NFL considered its commissioner, whose salary is close to $10 million, as its only key employee, and it is fighting a new IRS rule that would require the league — and all other nonprofit agencies, for that matter — to disclose any employee receiving more than $150,000 annually.
The league’s argument, according to a story in The New York Times, is that the NFL is not a charity that receives public donations, but rather a trade association financed by the 32 member teams, which can request and receive the salary information any time they want.
As a result, the league is asking to be exempt from the new reporting rule.
Joe Browne, the NFL’s executive vice president for communications and public affairs, told the Times there is no public purpose in disclosing more trade-group salaries.
But Sen. Chuck Grassley, an Iowa Republican, said: "Disclosure helps keep everyone honest. If, as requested, professional associations such as the NFL are allowed to keep salary information from the public, other tax-exempt groups would ask for the same treatment. This would be contrary to the goal of increasing transparency and accountability from tax-exempt organizations to the public."
First, the idea that the NFL is a nonprofit organization seems to be ridiculous on its face. The league has so many for-profit subsidiaries that generate hundreds of millions of dollars in income every year that the nonprofit status for the umbrella organization is a farce.
But who are we to question IRS regulations? If the NFL can qualify as a nonprofit agency, so be it. But then it shouldn’t squawk about the rules it is required to follow.
But chances are the NFL is more concerned about one of two things:
Its employees could learn what their co-workers earn and perhaps demand equity.
The public could learn the salaries, which could reflect poorly on the league.
Remember, we’re not talking about the NFL players here, but the people in the league office.
Marcus S. Owens, a lawyer who led the IRS Exempt Organizations Division from 1990 to 2000, told the Times that salary disclosure always had been one of the most politically sensitive parts of Form 990.
If that is the case and the NFL feels the reporting requirement is too great a burden for the league, it can follow in the footsteps of Major League Baseball, which gave up its not-for-profit status last year in favor of forming a for-profit corporation.
As a result, baseball is not required to disclose the salaries of its key employees on a form that the IRS makes available to the public. Problem solved.
Of course, that could mean a few other problems for the NFL, such as having to pay sales tax on its purchases and perhaps income tax on league revenues that exceed expenses — you know, profit.
But the league can’t have it both ways.